Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS ORDER CONFIRMATION

Mr. Secretary Ross presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to British Railways; and the same was read the First time; and ordered to be considered upon Tuesday 13th January and to be printed. [Bill 17.]

BROWNIES TAING PIER ORDERCONFIRMATION

Mr. Secretary Ross presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Brownies Taing Pier; and the same was read the First time; and ordered to be considered upon Tuesday 13th January and to be printed. [Bill 18.]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Diplomatic Service (Pay and Allowances)

Mr. Norman Lamont: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will examine the remuneration and tax-free allowances payable to Foreign Office employees in the light of the remuneration available in the private sector.

The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): The pay is the same as that of equivalent grades in the Home Civil Service and is adjusted in the same way. It is set by comparison with what is paid outside for comparable work. Allowances are kept under constant review in the light of all the relevant circumstances, including the economic situation in this country.
We are at present considering how we can reduce expenditure on our overseas work. We are reviewing the cost of entertainment and the most effective form it might take; we have already decided to make a 10 per cent. cut in entertainment allowances for the coming financial year.

Mr. Lamont: May I thank the Minister for the information he has already given me and assure him that nobody on this side wishes to conduct a witch hunt against the Foreign Office? However, he said the allowances were comparable to those in private industry. Will he therefore explain why, for tax purposes, they are treated differently from similar allowances in private industry? Is he aware that a senior diplomat—with a salary of £15,000 a year—who has four children can receive education allowances adding to his gross salary the equivalent of another £20,000 a year? Does he not agree that this puts these people in a totally unreal world, insulated from the economic pressures affecting the rest of the community?

Mr. Ennals: Overseas allowances are tax-free because they represent a compensation for the extra cost of having to


live abroad and are covered by Section 369 of the Income and Corporation Taxes Act 1970. I am sure hon. Members recognise that the education of children of members of the diplomatic service raises special problems. Diplomats spend most of their working lives in the service overseas and it is essential that there should be some continuity of education for their children. It is recognised that the State system does not provide much opportunity for boarding education.

Mr. Bidwell: Desirable as it is to have vigilance in these matters in Government Departments, does my right hon. Friend not agree that the tax avoidance industry is thriving, especially in the private sector and among many people to whose businesses the hon. Member for Kingston-upon-Thames (Mr. Lamont) gives diligent attention, including the fringe banks he was on about on television the other night? Does my right hon. Friend agree that we have to be vigilant on these matters, but that we should not make it appear that we are gunning particularly for civil servants?

Mr. Ennals: I am not conducting a witch hunt on either side of the House, but my hon. Friend has a point. There is very careful checking of expenses and allowances in the diplomatic service and, since we have a system of inspections and accounting, both sides of the House should recognise that the danger of avoidance is absolutely minimised.

Mr. Maudling: This is a difficult situation. Is the right hon. Gentleman aware that we have a diplomatic service of which we are entitled to be proud, and that I think it is still the best in the world? When the present arrangements were made they were fully justified, but is the right hon. Gentleman aware that many people in comparable posts in business and the professions feel that in changing circumstances, because of inflation and tax rates, they are facing difficulties and hardships that are not necessarily being faced by some members of the diplomatic service, who have this insulation against the changing world? There is that difference between the diplomatic service and the world outside. Will the right hon. Gentleman consider the matter in that spirit?

Mr. Ennals: Yes, I shall consider this problem. I said in my original answer

that we were looking at the question of reducing allowances, though not beyond the bounds of reason. The service must still properly fulfil its tasks abroad, in the country's interests, especially with export promotion, the collection of information and the rest of its responsibilities. We are examining carefully ways in which reductions in expenditure can be made, because of the present economic situation.

Rhodesia

Mr. Rifkind: asked the Secretary of State for Foreign and Commonwealth Affairs what action he proposes to take to facilitate a settlement of the Rhodesian constitutional problem with a view towards enabling the British Government to recognise Rhodesia as an independent State.

Mr. Maker: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the rôle to be played by Her Majesty's Government in helping to secure a settlement of the constitutional problem in Rhodesia.

Mr. Luce: asked the Secretary of State for Foreign and Commonwealth Affairs what progress was made by the Minister of State in his recent discussions on Rhodesia in Zambia; and whether he will make a statement.

Mr. Hooley: asked the Secretary of State for Foreign and Commonwealth Affairs if he will report on the most recent discussions between the United Kingdom Government and representatives of the people of Rhodesia.

Mr. Ennals: I visited Zambia and Tanzania from 4th to 8th December for talks with the leaders of those countries on Southern African questions, and with leaders of the Rhodesian nationalist movement on Rhodesia.
I took the opportunity to urge on all concerned the vital need for a negotiated settlement in Rhodesia. If it becomes apparent during negotiations that there is anything we can do to facilitate their successful conclusion, Her Majesty's Government will be ready to consider this.

Mr. Rifkind: Will the right hon. Gentleman inform the House whether the British Government recognise Mr.


Nkomo as being the main spokesman of African opinion in Rhodesia? Have they stressed to Mr. Nkomo and the Rhodesian authorities that any successful outcome of the present negotiations will have to be agreed and ratified by the British Government and Parliament before the legal independence of Rhodesia can be recognised?

Mr. Ennals: On the first part of the question, I have made clear in this House before that it is not for Her Majesty's Government to choose who should be representative of the African nationalist interests. In the course of my visit, I had discussions not only with Mr. Nkomo but with Bishop Muzorewa and the Reverend Ndabaningi Sithole, and we have not sought to put an imprint upon one or the other.
On the second part of the question, it is true that if negotiations between Mr. Smith and the representative Africans produced a basis of agreement that was within the Six Principles, Her Majesty's Government would welcome it, but the final decision must be taken by this House. That is fully understood by Mr. Smith and by Mr. Nkomo and his team.

Mr. Hooley: What steps are being taken to concert United Kingdom policy with the policy of the Organisation of African Unity, especially Tanzania and Zambia? Is it still Government policy that there should be no independence before majority rule? What steps are being taken to prevent the continued hanging of African political prisoners?

Mr. Ennals: One of the principal purposes of my visit was to have discussions with President Kaunda and President Nyerere in order that we could keep each other well informed and act together in so far as that is possible. As for the OAU, after my return I took the opportunity of sending a message to the organisation's chairman in order that he could know something of the discussions.
On the point about no independence before majority rule, we have made it clear that we do not want, in advance, to impose restriction on the nature of the negotiations that will take place between Mr. Smith and, at this stage, Mr. Nkomo. We shall look very carefully at whatever results from the talks, but if we were to

say automatically that there should be no independence before majority rule now, it would rule out the possibility of an interim Government.
We have made it very clear that, apart from their illegality, further trials and executions of political prisoners would hinder progress, and we have urged the authorities in Rhodesia to make clear that there will be no such executions.

Mr. Blaker: Bearing in mind the ultimate responsibility of this House, is it not important that the Government should have some means of keeping themselves informed about the progress of the current talks? What means do they have?

Mr. Ennals: We are keeping in touch with those who are participating in the discussions. It would be very difficult and, I think, unwise for us to have a representative there. We have not been asked by either side to be involved in the negotiations. There is a danger that if we were to send a representative to Salisbury it would in some way be taken as a form of diplomatic recognition. That would be quite wrong in the case of the illegal régime. We are finding ways of keeping ourselves posted on the developments.

Mr. James Johnson: The only man who can move events in the short term is Mr. Smith, and the only man who can move Mr. Smith in the short term is Mr. Voster. What are the Government doing in this respect to secure some understanding with South Africa in the matter?

Mr. Ennals: We are, of course, in touch with the South African Government on this question. I agree with my hon. Friend that much depends on the influence of the South African Government upon Mr. Smith. But I do not think that this is the only form of influence upon him. He must by now be aware that if he does not take this opportunity of negotiating a just and peaceful settlement it seems inevitable that there will be armed conflict. It is important that those in Rhodesia should recognise that time is running out and that if there are no major concessions now they will be facing a situation that is disastrous not only for the African people but for the Europeans in Rhodesia, too.

Mr. Luce: Further to what was said by my hon. Friend the Member for Blackpool, South (Mr. Blaker), is it not extremely important at this stage for the British Government to be kept continually apprised of the rapidly changing situation in Rhodesia? In view of that, is it not essential to have some means of developing a regular flow of information from Rhodesia?

Mr. Ennals: I have already dealt with that. There are considerable difficulties about this, and I spelled them out. The point that the hon. Member raised will be borne in mind. It is important to keep informed. At present we are satisfied that we are well informed about the progress of the talks.

Mr. Lee: I welcome the general tenor of my right hon. Friend's views, but will he enlarge a little more on the question of the interim Government? Am I to understand that any such interim Government would certainly have to be instituted before there was any question of the recognition of independence? If not, we would seem to be going back on the promise of no independence before majority rule.

Mr. Ennals: My hon. Friend's view would gain wide acceptance in the House. However, it would be unwise at this stage to make a firm commitment before knowing the nature of the proposals that might result from the negotiations, if they make progress. It would therefore be best for the House to look at the proposals when they are submitted to us.

Protection of Minors (Hague Convention)

Mr. Alan Clark: asked the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government intend shortly to become a signatory of the Haagen agreement relating to the abduction of minors.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): I assume that the Question refers to the Hague Convention of 1961 concerning the protection of minors. A Working Party of the Law Commission and the Scottish Law Commission is reviewing conflicts of jurisdiction concerning children. The question of

signature of this Convention will be considered in the light of the Commission's views.

Mr. Clark: Is the Minister aware of the case of my constituent, Mrs. McCartney, whose five-year-old son was snatched by her estranged husband and removed from this country on the basis of a false passport declaration? Does the right hon. Gentleman agree that if we were parties to this agreement the task of enlisting the co-operation of foreign police forces to locate and return such children would be very much easier? Since these cases are regrettably becoming more frequent, is it not time that such a move was expedited?

Mr. Hattersley: I make no judgments on the McCartney case this afternoon. The Convention to which the hon. Member referred was an attempt to reconcile two different principles in these matters, and the British Government have to look very carefully at the reconciliation of those principles to make sure that the application of the Convention in Britain would be in the best interests of British citizens and their children who might go abroad.
If the hon. Member will send me the details concerning Mrs. McCartney and her child, I shall pursue the case as best I can in her interests.

Nuclear Suppliers Group (Meeting)

Mr. Robin F. Cook: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent meeting of the Nuclear Suppliers Group in London.

Mr. Hattersley: As I told my hon. Friend the Member for Salford, East (Mr. Allaun) on 7th November, officials from a number of countries have met in London to discuss common problems in the field of nuclear energy. The discussions were multilateral and confidential.—[Vol. 899, c. 370.]

Mr. Cook: Many hon. Members warmly welcome these discussions and appreciate the initiatives which appear to have been taken by the Government. I appreciate that the discussions are at a delicate stage, but will my right hon. Friend say whether the Government have


considered the possibility of regional control for fuel processing—an idea that was much supported at the Geneva Conference, though not then supported by the nuclear weapon States, including ourselves?

Mr. Hattersley: I am grateful to my hon. Friend for his first remarks. In principle, I see a great deal of attraction in my hon. Friend's suggestion about regional control, but there are a number of technical problems which must be examined with care. Nevertheless, we agree on the principle.

Mr. Frank Allaun: Will my right hon. Friend reconsider the dangers of exporting plutonium from Windscale to Japan and four other countries? Will he bear in mind that officials at Windscale say that this is not essential to the carrying on of normal activities there?

Mr. Hattersley: There is a substantial case to be made out for ensuring that those countries with nuclear capabilities enable those capabilities to be used for wholly peaceful purposes, as long as there is a satisfactory system of safeguards to make sure that they are limited to those purposes. That must be the policy of those countries which already have nuclear capabilities.

Western Security (Atlantic Treaty Association Declaration)

Mr. Eldon Griffiths: asked the Secretary of State for Foreign and Commonwealth Affairs what is his policy towards the recent declaration of the Atlantic Treaty Association that the threat to Western security is increasing while perception of that threat is diminishing; and if he will refrain from making such cuts in Great Britain's contribution to the military strength of the Western Alliance in Europe and elsewhere as would leave his ability to influence NATO strategy and protect British interests in the world much reduced.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): My NATO ministerial colleagues and I reaffirmed in Brussels last week our determination to maintain and improve the efficiency of our forces in the face of the steadily expanding power of the armed forces of the Warsaw Pact. The Government are firmly committed to

maintaining an effective British contribution to NATO, which remains the first and overriding charge on our resources available for defence.

Mr. Griffiths: Is the Foreign Secretary aware that there is concern and even anxiety in the United States and Western Europe about several aspects of British foreign policy, for example, import controls, which appear to contradict the spirit of Rambouillet; borrowing from the International Monetary Fund more than our share at the expense of less developed countries; and the prospect of cuts in defence against the background just described by the right hon. Gentleman? As the Foreign Secretary has a special responsibility within the Cabinet for the position of the United Kingdom in the world, will he give his personal undertaking to resist any cuts in British defence that would put at risk our influence within NATO and to do his utmost to ensure that our relations with the United States and Western Europe remain sound and solid in these difficult days?

Mr. Callaghan: During the past few days I have had the opportunity of discussions with the United States Secretary of State, both in Paris, yesterday, and in Brussels, last Friday. I do not think that he would wholly recognise the description that the hon. Gentleman employed. As to the future of our defence—which is what the Question relates to—I do not give personal assurances on that matter. Of course not. These are collective decisions. They will be collectively taken, collectively advocated and collectively defended.

Mr. Flannery: Does my right hon. Friend agree that our contribution to NATO as a percentage of our gross national product is massively higher than those of other contributors? Does he further agree that we could massively cut our defence contribution to bring it into line with that of other members of NATO?

Mr. Callaghan: The answer to the first part of my hon. Friend's supplementary question is that our expenditure, as a proportion of gross domestic product, is still higher than that of some of our NATO allies. [Interruption.] I am answering my hon. Friend's supplementary question, not sedentary interruptions. There is, therefore, no reason why


we should be ashamed of our contribution to NATO. We are paying more, as a proportion of GDP. But that is not the only measure. Measured in terms of total expenditure, we are not ahead of other nations. Some nations in NATO are ahead of us. I am sorry that I part company with my hon. Friend in replying to the second part of his supplementary question. Massive cuts would not support the present processes of multilateral disarmament upon which we are embarking, nor would they represent the proper contribution that this country should make, and they could increase the dangers in Central Europe. I ask my hon. Friends to reflect on that last point.

Mr. Maudling: If I heard the Foreign Secretary aright, he said that he and his colleagues committed themselves to improving the efficiency of their defence forces. May we take it that any decisions made by the Government on defence expenditure are based on the principle that they will improve the efficiency of our defence forces?

Mr. Callaghan: The first part of my answer referred to the collective decision of all the NATO countries. There is a common determination to maintain and improve the NATO forces, and we shall take our part in that.

Mr. Cryer: Does my right hon. Friend agree that NATO has more men under arms and more tactical weapons than have the Warsaw Pact countries? Therefore, should not we implement Labour Party policy to reduce the proportion of our GNP spent on defence to the proportion spent by our allies? Does my right hon. Friend agree that in our present economic position we can no longer afford to prop up the myth that the Eastern bloc is ready to catch a train to come over to conquer us?

Mr. Callaghan: I have not the figures with me, and that supplementary question should probably be asked of my right hon. Friend the Secretary of State for Defence. I doubt whether my hon. Friend's comparison is accurate, but I should like to check it. The proposals that were put to the Warsaw Pact countries yesterday are designed to achieve a common ceiling in manpower, and a common ceiling in manpower is reckoned

to be to the advantage of Western Europe, because Eastern Europe has more men under arms. In exchange, certain other changes would be made.
On the question of reductions in relation to GNP, if my hon. Friend examines the proposals put forward by the Government over a period of years he will find that the initial reductions that were made were calculated to achieve that end. I would much prefer us to increase our GNP at a faster rate—which would make the proportions more equitable—rather than cut our defences substantially emphasise again that this cannot be measured purely and simply in terms of cash; there are political considerations that greatly affect the welfare of Central Europe, and we should not overlook them.

Civil and Political Rights (UN Convention)

Mr. Gould: asked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans for the ratification of the United Nations Convention on Civil and Political Rights.

Mr. Ennals: Our signature of the United Nations Covenant on Civil and Political Rights indicates an intention to ratify in due course, but I am unable to give a date at present.

Mr. Gould: Will my right hon. Friend say why we were able to accept extensive obligations under the European Convention on Human Rights, whereas nine years have elapsed without ratification of the United Nations covenants, which place upon us obligations which are no more extensive and whose machinery for enforcement is less precise? Given the number of countries that have ratified those covenants, are we not dragging our feet?

Mr. Ennals: There are two covenants, and they are more widely embracing than are the European equivalents. A major reason for the delay in ratification is that acceptance of the United Nations covenants ties us to our dependent territories. Work has to be done in assessing to what extent the legislation of the dependent territories brings them into line, so that the United Kingdom Government can accept the covenants.

Cyprus

Mr. Terry Walker: asked the Secretary of State for Foreign and Commonwealth Affairs what new initiatives he is taking over the Cyprus problem.

Mr. James Callaghan: I discussed the Cyprus problem at length with the Greek and Turkish Foreign Ministers in the margin of the NATO Council meeting in Brussels last week, and also had talks with the American Secretary of State. In the course of these discussions certain proposals were agreed as a basis for the resumption of intercommunal talks between Mr. Clerides and Mr. Denktash. These talks will begin again in the new year and I am sure the House will wish them success.

Mr. Walker: I thank my right hon. Friend for his valuable work on Cyprus. Is he aware that many of us believe that unless the British Government take a new initiative in the new year a lasting peaceful solution to the Cyprus question will not be achieved?

Mr. Callaghan: I know my hon. Friend's view. This matter is kept constantly under review. I adhere to my view—and there is no disposition to quarrel with it among those who examined the problem—that the best progress will be achieved between the leaders of the Greek Cypriot community and the Turkish Cypriot community, with Dr. Waldheim also in attendance at the discussions. I believe that starting on that basis is the best way to achieve a lasting peace.

Mr. Bowden: Is the Foreign Secretary aware that a number of British citizens have suffered confiscation of their property and personal belongings, and considerable financial hardship? What steps has he taken to alleviate that hardship? Will he consider claims for compensation?

Mr. Callaghan: I am very much aware of it, and I wish that I could have done more. I regard this as one of the areas in which we have not been very successful. But we are continuing our efforts to persuade those whom we hold responsible for British losses in Cyprus—that is, the Government of Turkey and, to a lesser extent, the Government of the

Republic of Cyprus—to institute compensation procedures. However, so far we have not been successful.

Saudi Arabia and Gulf States

Mr. Aitken: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to Saudi Arabia and the Gulf States.

Mr. James Callaghan: I visited the area from 22nd to 30th November. I had wide-ranging talks with the Heads of State—except Sheikh Zaid of the UAE who was indisposed—and senior Ministers in each country, on political and economic questions, both bilateral and multilateral. I found abundant evidence of good will towards Britain and of the enormous potential for British exports. I am anxious that both Government and industry should exploit these openings to the full.

Mr. Aitken: Is the Secretary of State aware that British exporters, who, as he rightly says, have such tremendous opportunities in this area, are to some extent unable to capitalise on the good will engendered by the Government's diplomatic initiatives, because of certain special problems relating to performance bonds? In particular, does he realise that in Saudi Arabia many of the contracts awarded are in the range of £100 million and over, and that, because of this, many medium and even large British companies are finding difficulty in providing the essential 10 per cent. performance bond guarantees required to make them participate in those contracts? Since this is a week in which the Government are being generous in providing bank guarantees to American lame ducks in this country, does the right hon. Gentleman not think that he could do something, perhaps through ECGD, to be helpful in providing bank guarantee arrangements to successful British companies exporting to the Middle East?

Mr. Callaghan: I noted what the hon. Gentleman said in the debate on foreign affairs. When I went on my visit I took with me for the first time representatives of British industry as part of my official party. There seemed to be a lot to be said for that, and I think that it had some value. As for the financial aspect,


that came up a number of times. The Joint Commission that has been established between Britain and Saudi Arabia will have its first meeting in January. This matter may be considered then. But in any case I shall draw what the hon. Gentleman says to the attention of the Secretary of State for Trade.

Mr. Flannery: Will my right hon. Friend accept it from me that many hon. Members on the Government side—and, of course, none on the other side—are deeply disturbed at the secondment of troops, amounting to their use as mercenaries, to the Omani Republic, that many of us regard this as a defence of feudalism against progressive forces, and that we deplore it and hope that it will never happen again?

Mr. Callaghan: It is true that for some years British Service men, on contract or otherwise, have been assisting the Sultan of Oman and his forces, but I feel that the invasion that has taken place and the support that the rebel forces have received from neighbouring States would hardly qualify for my hon. Friend's description. But what is important—I had a long conversation with the Sultan about this—is that, now that the rebellion seems to be pretty well over, the Sultan of Oman should proceed with a number of schemes for housing, education and social welfare. I understand from him that it is his policy to do so, and it will certainly be with the encouragement of Her Majesty's Government.

Mr. Tugendhat: Does the right hon. Gentleman agree that in the Arab world, perhaps more than anywhere else, it is important to have frequent high-level ministerial visits and extremely undesirable for those visits to be cancelled at short notice? Does he also agree that in the Gulf there is a great deal of good will towards Britain, but that that good will does not extend to the Gulf States leaving their money in London with the exchange rate of the pound depreciating at the rate that it has done over the last year and that if it continues to depreciate at that rate we cannot expect them to continue to leave their money here and bail us out?

Mr. Callaghan: On the first point, I found that there was a great desire for

high-level visits from business men from this country, rather than leaving the transaction of business to legal agents and representatives. I hope that firms can do this. If the hon. Gentleman's remark about the cancellation of high-level visits was a snide reference to the Prime Minister's proposed visit, he might have the courage to say so—but in any case that has not been cancelled; it has been postponed for two or three months. Sheikh Yamani and I had a conversation about this yesterday. The hon. Gentleman's anxieties can be totally relieved.
As for the depreciation of sterling, the Arab leaders have a better appreciation of the situation than the hon. Gentleman has. They are quite capable of working out the rate of interest which can be secured in the City of London and the rate of return on the purchase of longterm gilts at the moment, and are quite capable of setting off that calculation against the depreciation of the pound—perhaps even more capable than the hon. Gentleman is.

Mr. Tudendhat: But they are not buying.

Republic of Ireland

Mr. Townsend: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Anglo-Irish relations.

Mr. Hattersley: Anglo-Irish relations have stood up well to the strains imposed by recent terrorist activities on both sides of the Irish Sea. We are continuing to develop our already close co-operation with the Irish Government on matters of mutual interest.

Mr. Townsend: Accepting that cross-border co-operation has improved in recent years, and bearing in mind that the border lies between two friendly countries, both members of the EEC and both dedicated to the destruction of the IRA, is it not nevertheless true that the level of co-operation is far from satisfactory, particularly in military matters? Will the right hon. Gentleman, after consultation with the Secretary of State for Northern Ireland, continue vigorously to press the Dublin Government on this matter?

Mr. Hattersley: On military co-operation and the effects on the Northern


Ireland situation, the hon. Member must put down Questions to the Secretary of State for Northern Ireland. But I have no doubt that the Government of the Republic of Ireland share our desire to stamp out terrorism on both sides of the border and are co-operating to the best of their ability to bring that about.

Dr. M. S. Miller: Will my right hon. Friend resist with every fibre of his being the hysterical attempts by some people to drive a wedge between the Irish people and the British people and to castigate and put into a third-class category Irish citizens, of whom the vast majority have nothing to do with terrorism?

Mr. Hattersley: Perhaps before I answer I should declare an interest, in that I represent thousands of Irish citizens in the constituency of Birmingham, Sparkbrook, and am very proud to do so. I confirm what my hon. Friend said. Most citizens of Ireland who have come to Britain to live and work deplore the outrages of the recent past as strongly as we do. That cannot be said too often.

Mr. Kilfedder: Does the right hon. Gentleman not agree that the Eire Government could make a sensible contribution to Anglo-Irish relations by withdrawing its case against the United Kingdom at the International Court of Justice?

Mr. Hattersley: We have always taken the view that the Irish State case, as it is called, is appropriate for a friendly settlement rather than its pursuit to the last iota of legal examination—but I understand some of the pressures exerted on the Irish Government in this matter. I disagree with the position that they have taken up, but it should not prejudice our general view of the desirability and the hopes that that Government have of co-operating with us in all these matters.

Indian Sub-Continent (United Kingdom Entry Applications)

Mr. Bidwell: asked the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken at high commissions in the Indian sub-continent to shorten delays in interviewing applicants for entry certificates.

The Under-Secretary of State for Foreign and Commonwealth Relations (Mr. Edward Rowlands): Immigration staffs in the sub-continent have been increased

and special simplified procedures have been introduced for the more expeditious processing of certain categories of applications.

Mr. Bidwell: Will my hon. Friend ponder very seriously on that reply and think deeply about the social consequences of the effects on married life when married couples are separated for 18 months or two years—a separation that threatens the continuity of the marriage? Will he consider the possibility of a scheme being applied in both Delhi and Bombay, such as apparently applies in Islamabad—that is, that with six months' notice on this side of such applications by a couple they can come back to this country together if they choose to be domiciled here? Otherwise, with the present Home Office regulations under the 1971 Immigration Act, my hon. Friend is in danger of going down in history as the match-breaker and not the match-maker.

Mr. Rowlands: As a Welsh romantic, I should not like to be dubbed a match-breaker. I certainly contemplate the social considerations every day. I sign 150 letters a month to Members of Parliament on the problems of immigration, many of them involving separation. I shall consider my hon. Friend's point. We are doing our best. The process of applications has been accelerated, but I am afraid that the number of applications is also rising.

Mr. Kershaw: How many relatives are still to come? Will this list be wiped out in due course, or will husbands here constantly renew the numbers in the queue?

Mr. Rowlands: There are widely varying estimates of the figures. My hon. Friend the Minister of State, Home Office will be able to give the most accurate assessment. In many cases we are still processing applications, and we shall do that as speedily as possible. I appreciate the social consequences, but within the immigration rules we are doing everything that is administratively possible to help.

Australasia

Mr. Tim Renton: asked the Secretary of State for Foreign and Commonwealth Affairs when he next proposes to visit Australasia.

Mr. Rowlands: My right hon. Friend has no plans at present to visit Australia or New Zealand.

Mr. Renton: Will the Minister persuade his right hon. Friend to change his mind, so that in view of the recent major change of political direction in both those countries he may gain a little from their experience? In particular, is there not a case for wide-ranging discussions between Britain and the new Governments of Australia and New Zealand on such matters as trade and security in the Pacific basin, following Communist successes in Vietnam?

Mr. Rowlands: I am sure that there is a case for wide-ranging discussions, but my right hon. Friend has no plans for a visit at present. The hon. Gentleman may be disappointed, but there is little correlation between what happens in politics in Australia and New Zealand and what happens in Britain.

Mr. Eldon Griffiths: In view of the quite devastating repudiation of Socialism by the predominantly British people of Australia and New Zealand, will the hon. Gentleman rescue his colleagues in the Foreign Office and in the Ministry of Defence from one particular dilemma—namely, that they are still replying to letters from hon. Members of this House as late as Monday of this week by saying that Her Majesty's Government support Mr. Whitlam's policy for the neutralisation of the Indian Ocean? As this is not the view of the new Government of Australia, will the hon. Gentleman persuade his colleagues to think again and to write more accurate letters to hon. Members?

Mr. Rowlands: We still suppport Mr. Whitlam's view concerning the Indian Ocean.

Oral Answers to Questions — EUROPEAN COMMUNITY

European Parliament (Direct Elections)

Sir A. Meyer: asked the Secretary of State for Foreign and Commonwealth Affairs what undertakings he gave at the last meeting of the European Council on preparations in the United Kingdom for direct elections to the European Parliament.

Mr. George Gardiner: asked the Secretary of State for Foreign and Commonwealth Affairs what steps he now proposes to secure direct elections in the United Kingdom to the European Parliament, following the agreement among the EEC Heads of Government in Rome.

Mr. Dykes: asked the Secretary of State for Foreign and Commonwealth Affairs what preparations and plans will now be made by Her Majesty's Government to meet the European Council's target of 1978 for direct elections to the European Parliament; and if he will make a statement.

Mr. James Callaghan: I would refer the hon. Members to the statement that my right hon. Friend the Prime Minister made on 4th December.—[Vol. 901, c. 1932.]

Sir A. Meyer: Is the Foreign Secretary aware that he now has an opportunity to repair some of the consequences of the disastrous blunders that he made in his dealings with our European partners and that there is here an opportunity for the United Kingdom Government to show themselves as good Europeans and adult members of the Community at no cost in votes, and thereby to gain a good reputation? The Foreign Secretary should be aware that he will not lose his seat if he takes this further step. Will he indicate whether there has been further progress?

Mr. Callaghan: The term "good European" should be used with great care. I do not regard as good Europeans those who put forward impossible pledges that are incapable of being carried out within the time scale that is set. We have put our hands to this particular road and we shall follow it with due regard to the undertakings that we have given and with all regard to British interests in these matters.
I also suggest that the hon. Gentleman should not believe everything that he reads in the newspapers about these matters. There is a particular Brussels lobby that is inclined to write that everything Britain does is wrong and everything anyone else does is right. On the whole, I do not find that my colleagues take that view.

Mr. Spearing: Does my right hon. Friend recall that in the statement to


which he referred the Prime Minister said that in principle the Government accepted the obligation of direct elections? Does he recall that at the last December summit the Prime Minister said that this matter must await the outcome of the then forthcoming referendum? Will my right hon. Friend tell the House what has changed in respect of any obligation in the Treaty of Rome between last December and this December?

Mr. Callaghan: The referendum.

Mr. Gardiner: The Foreign Secretary will be aware that the last time I put a Question on this subject his right hon. Friend the Minister of State gave a reasonably helpful reply. Since then there has been the European Council meeting and the prospect that after 1978 British subjects will be second-class citizens in the European Community, in the sense that we shall be one of the few nations that are not represented by directly elected members of the European Parliament. Is the time not right for the Foreign Secretary or one of his colleagues to initiate pretty full discussions with all interested parties in this country to find out how to set about the task of directly electing our own representatives at Strasbourg?

Mr. Callaghan: I do not accept the charge that the people of this country will be second-class citizens, because it is for the House to decide whether we shall be able to secure direct elections by 1978. I have been trying to preserve the position of the House in this matter, with the result that in Brussels I am sometimes accused of dragging my feet and here I am sometimes accused of having given everything away. It is for the Government, in the light of the discussions that took place in Rome, to produce a series of questions, in the form of, perhaps, a Green Paper, to enter into discussions with the political parties, Transport House and Conservative Central Office and to have debates in this House. We are working on this now, and I hope that shortly after the House returns from the Christmas Recess it will be possible to publish such a paper. It will then be for the authorities of the House to decide how we debate it.
Meantime, in addition to and sideways with that, discussion with the parties, as such, must continue. I promise the

House that I have no intention either of holding the matter up unnecessarily or of rushing it. We all fight to retain our own seats. Any politician can understand the practical difficulties that have to be ironed out in this situation, including—if I may speak from this Dispatch Box for one moment as Treasurer of the Labour Party—finding an answer to the question: who will finance these elections?

Mr. David Steel: Will the right hon. Gentleman confirm that the Government's reservations about the 1978 date are ones not of principle but of practicality? If that is so, will the Minister explain why it is that we are somehow less competent than, say, the people of Italy, Ireland or any other country of the Nine in achieving the target date of 1978?

Mr. Callaghan: I find that a little difficult to answer. I believe that some of my colleagues must have much more tractable and docile Parliaments with which to deal than we have. If the House wills it, we can achieve this by 1978—I have no doubt of that. The hon. Gentleman is quite right, this is a matter of practicality and not of principle. Perhaps I could speak wearing another hat, namely, as a former Home Secretary. I do not underrate the great difficulties of setting this machinery going, and I advise the House not to underrate them. However, I shall not mind if the House says "Please hurry up. You are being too slow." That will not offend me, provided we go through the proper processes of consultation, decision and legislation.

Mr. Raphael Tuck: Direct election to the European Parliament has a distinct aroma of federalism. Will my right hon. Friend ensure that if such a question is raised the British Government will oppose completely any such proposal?—[Interruption.]

Mr. Callaghan: There seem to be countervailing cries of "Yes" and "No".

Mr. Raphael Tuck: I meant federalism.

Mr. Callaghan: Yes, I heard my hon. Friend. There is no proposal for federalism now. If such a proposal should ever come forward, it would be for the House of the day to take a decision on such a matter. I do not know whether I shall still be here when the decision is taken.

Sir A. Meyer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of those replies, I beg to give notice that I shall seek an early opportunity of raising the matter on the Adjournment.

Mr. Marten: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Council of Ministers about the proposal to have direct elections to the European Parliament.

Mr. James Callaghan: Following the European Council's request for a report that would enable the text of a Convention to be finalised at its next meeting, the Council of Ministers agreed on 9th December that the Committee of Permanent Representatives should continue examination of the problem.

Mr. Marten: While not myself approving of direct elections to this European Parliament, may I ask the right hon. Gentleman whether the Green Paper that he has said might be published will contain a pretty firm statement as to the powers that any European Parliament may have, if we ever have one? Secondly, will it contain a statement that these powers cannot be increased by the European Parliament itself without the consent of each national Parliament? Thirdly, will it contain a firm commitment that the European Parliament will not commit this country to proportional representation?

Mr. Callaghan: I have not yet submitted this proposed Green Paper to my colleagues, so I have no idea of the improvements that they will wish to make to it. I would not have expected to go into the question of the powers of the European Parliament and any increase in those powers, because this is concerned with the modalities of direct elections. I have taken note of what the hon. Gentleman says. I have no desire or intention of going over to the question of proportional representation, although I understand it is being considered in other quarters.

Dr. J. Dickson Mabon: Will the Foreign Secretary confirm that in the Green Paper there will be a discussion of the option whether there should be a common day for elections for the

European Parliament, or whether there is an argument for having elections on the same day as a General Election in Great Britain? With reference to the last question, will my right hon. Friend say a little more on the question whether or not you, Mr. Speaker, will preside over a committee that may discuss the question of proportional representation for these elections, or some other mechanism whereby consultation with the parties can take place?

Mr. Callaghan: I do not think that I have anything to add on the last part of the question. However, on the first part, certainly the Green Paper must put forward views on the question of a single election date or a number of them. But this is one of the very few questions that will probably have to be decided, inevitably, by its very nature, by the Council of Ministers, because it will affect all nine member States, whereas the question of the modalities of the election—what kind of constituencies we have; how we run it, who can be nominated, and all the rest of it—is clearly a matter for the House to determine in due course.

Council of Ministers

Mr. Canavan: asked the Secretary of State for Foreign and Commonwealth Affairs when he next proposes to meet representatives of the EEC.

Mr. Hattersley: The next meeting of the Council of Ministers (Foreign Affairs) will be held on 19th and 20th January.

Mr. Canavan: At the first available opportunity will my right hon. Friend tell his friends in the Common Market that an increasing number of the unemployed people in this country who voted "Yes" are becoming increasingly angry over the referendum propaganda about "jobs for the boys"? Does my right hon. Friend agree that it is about time that a multinational community such as the Common Market stopped its pussyfooting attitude towards multinational companies and, instead, brought some collective pressure to bear on multinational companies to make them face their social responsibility to provide more jobs, especially in view of the Chrysler fiasco?

Mr. Hattersley: I am sure that my hon. Friend and I agree about the tragedy of


increasing unemployment and the regrettable nature of the increases that have taken place. For my part, I have no doubt that if Britain had voted to withdraw from the Economic Community unemployment in this country would have been a great deal higher than it is now.
Secondly, like my hon. Friend, I want to see increased control over multinational companies, but that control can come only from multinational co-operation from individual States, and that the EEC offers the best prospects to provide.

Mr. Biffen: When the right hon. Gentleman does next go to Brussels and meet representatives, will he inquire whether or not the negotiations concluded with Chrysler fall within the provisions of our treaty commitments, not least on account of the very authoritative comment that appears in today's edition of the Financial Times, which suggests that they may well constitute a form of concealed subsidy and, therefore, fall without our treaty obligations?

Mr. Hattersley: I have often told the hon. Gentleman and others who think like him that the EEC is a much more flexible organisation than some people give it credit for. I have no doubt that in the special circumstances attendant on the Chrysler declaration and the Chrysler decision, the Community will understand the need for the British Government to do what they have done.

Mr. Skinner: Is it not true, however, that Norway took a decision to keep out of the Common Market and that as a result of that decision the Norwegians are now managing to weather the capitalist economic storm much better than we are, particularly in regard to unemployment?

Mr. Hattersley: It is certainly true that Norway decided to keep out of the Common Market. It is not true that that contributed to Norway's increased prosperity. There are some of us who may think that the fact that Norway got its oil ashore five years earlier than Great Britain made some contribution to its prosperity.

Mr. Eldon Griffiths: Bearing in mind that the referendum is now behind us and these matters are really of the past, may I remind the right hon. Gentleman that there brave been no fewer than eight, or possibly nine, meetings of the Council of

Ministers in Europe this month, some of them of considerable importance, but there has been no statement to this House on the subject? The Opposition would not ask that in every case statements should be made, but I ask the right hon. Gentleman and his right hon. Friend that occasions should be taken to inform this House more frequently than has been the case of what Ministers are actually doing in our name in Brussels.

Mr. Hattersley: I agree with that wholeheartedly. However, the hon. Gentleman will recall that when we last had a statement on these matters there was some criticism about its value in the House. I do not think that the hon. Gentleman will recall—because he was not here—that on the last occasion on which we debated European matters the debate collapsed after 45 minutes because there were not sufficient Members in the House to keep it going.

Mr. Wigley: asked the Secretary of State for Foreign and Commonwealth Affairs on how many occasions he has specifically addressed the Council of Ministers on the problems of Wales.

Mr. James Callaghan: I have spoken for the interests of Wales in the Council of Ministers and have also corresponded about them whenever they were relevant to the questions under discussion. I have done the same for all other parts of the United Kingdom.

Mr. Wigley: Is the Foreign Secretary aware that there were 54 meetings of the Council of Ministers in the year up to the end of October but no Welsh Office representative attended any one of them, although there were representatives from the Scottish Office in attendance? Will the right hon. Gentleman therefore clarify the situation and confirm that there is a right and a principle, at least, for the Welsh Office to be represented at these meetings? Will he also make sure that in future, when the Council of Ministers discusses subjects such as agriculture, transport, or regional policies, where there is a direct Welsh Office interest in these matters, a Minister from the Welsh Office is invited to go along with him to these meetings?

Mr. Callaghan: I assure the hon. Gentleman that the right hon. Member for Cardiff, South-East was present at


nearly all of the meetings to which he has referred. Whether they were to discuss regional funds, development area status—including its extension to parts of Wales—the future of steel or the question of farming, on all these matters the right hon. Member for Cardiff, South-East was there, and was speaking. If my right hon. and learned Friend from the Welsh Office would like to accompany me, he can come with pleasure whenever he wants to, as can the Secretary of State for Scotland. On the whole, however, they rather believe that the interests of Wales and Scotland are very well looked after at present.

Mr. Kinnock: Is my right hon. Friend aware that the hon. Member for Caernarvon (Mr. Wigley) is well known throughout Wales as being a very balanced Nationalist, in that he has a chip on both shoulders? My right hon. Friend has spoken up so often for the interests of Wales, in Brussels and elsewhere, that he is commonly known as "Jim the Trip". Is my right hon. Friend aware that in any case, with all the inadequacies of the EEC and the criticisms that many people in Wales and elsewhere have in relation to it, we are far more concerned with the power that is exercised by that body and the manner in which it is exercised than with the paraphernalia and the machinery of Government and the question whether the appropriate Under-Secretary from the Welsh Office happens to be at the meetings?

Mr. Callaghan: Yes, Sir. I should like to make clear that these issues, whether they are concerned with the problems of Northern Ireland, Wales or Scotland—or, indeed, any other area—are always cleared either by way of correspondence between Ministers or meetings between Ministers before meetings take place in Brussels. I hope that I can claim that I am extremely scrupulous, for obvious reasons. After all, I care about the regions. I come from one of them. [An hon. Member: "Regions?"] Of course. There is no obscenity in using the word "region". I want to make it clear to the House that I regard it as my first responsibility to ensure that the welfare of the people concerned is taken fully into account in the discussions that we have.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Dr. Hampson: On a point of order, Mr. Speaker. The Select Committee on Procedure drew attention in 1971 to the abuse by Ministers of inspired Written Questions. The Department of Education and Science has been carrying out this abuse for some time, culminating this morning in a sneaky whisper of an announcement about raising student fees. The Department knows that this is an emotional issue because of the row which was caused on this issue on exactly the same day, the Wednesday before the Christmas Recess, in 1967.

Mr. Speaker: Order. What has this to do with the Chair?

Dr. Hampson: I believe that this is an abuse of the rights of the House, Mr. Speaker, particularly the cherished right of scrutiny of Ministers, because of a Minister seeking to avoid embarrassing cross-examination of a major policy change—

Mr. Speaker: Order. That is not a matter for the Chair. How Ministers decide to answer Questions, whether by written or oral answer, is not a matter for me.

Oral Answers to Questions — BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 16th JANUARY

Members successful in the Ballot were:

Mr. Robert Kilroy-Silk

Mr. Michael Hamilton

Mr. Michael Neubert

Oral Answers to Questions — QUESTION OF PRIVILEGE

Sir John Langford-Holt: I would draw your attention, Mr. Speaker, and ask you as coolly as one can to consider a report which has appeared in The Times and the Daily Mail today of some remarks attributed to Mr. Sidney Weighell. The report talks at the outset about Mr. Weighell's accusing one right hon. Gentleman of being a "bloody liar". This is a matter not for the House—

Mr. Speaker: Order. Will the hon. Gentleman deal with the mattter as shortly as he can? I have a letter which I propose to read to the House.

Sir J. Langford-Holt: I shall read briefly from the report in the Daily Mail, which says:
Mr. Weighell countered by telling a rail-waymen's rally …" He is a bloody liar'.
Then Mr. Weighell, in an angry outburst, said that the union's ten sponsored MPs would be told to vote against the Government unless it changed its direction in the rail industry.
He said: We shall not hesitate to say to our ten NUR MPs that you will no longer support this Government no matter how critical the situation is.' …
Afterwards, Mr. Weighell said his remarks should be taken only to include voting on rail matters and no other aspects of Government policy.
They know that when I am talking about railways there is no area in which they can deviate from what we are expecting from them,' he said.
In my submission, that is at most a threat and at least an unwarranted intrusion into the rights of hon. Members.

Copy of publication handed in.

Mr. Speaker: I have received today a letter from the General Secretary of the National Union of Railwaymen, saying:
Regarding the newspaper reports of the meeting at Central Hall held yesterday in which I was quoted as stating that I would 'instruct' NUR sponsored MPs to withhold support from Her Majesty's Government in certain circumstances, I wish to state that no such instructions would ever be issued by myself or any other Officer of this Union.
Although I do accept that I used the words quoted, I would wish you to know that I sincerely regret any such inference and I am conscious that the freedom of action of individual Members of Parliament must be respected by all sections of British society. I would wish you to place on record my humble apologies for this discourtesy to the House of Commons and I give an undertaking that Members of Parliament sponsored by this Union are free to act in the traditions of British democracy.
I hope that in view of that letter the hon. Gentleman will not pursue the matter.

Sir J. Langford-Holt: With your permission, Mr. Speaker, in those circumstances and in the light of that letter, I do not seek to proceed with the matter.

Mr. Speaker: I am obliged to the hon. Gentleman.

BILLS PRESENTED

EDUCATION

Mr. Secretary Mulley, supported by Mr. Secretary John Morris, Mr. Robert Sheldon, Mr. Barry Jones, and Miss Joan Lestor, presented a Bill to amend the law relating to education: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 19].

CONGENITAL DISABILITIES (CIVIL LIABILITY)

Mr. Ray Carter, supported by Mr. Jack Ashley, Mr. David Steel, Mr. Leo Abse, Mrs. Lynda Chalker, Dr. M. S. Miller, Mr. Emlyn Hooson, Mr. Neil Macfarlane, Mr. Lewis Carter-Jones, Mr. Ian Lloyd, Mrs. Millie Miller, and Mr. John Farr, presented a Bill to make provision as to civil liability in the case of children born disabled in consequence of some person's fault; and to extend the Nuclear Installations Act 1965, so that children so born in consequence of a breach of duty under that Act may claim compensation: And the same was read the First time: and ordered to be read a Second time upon Friday 6th February and to be printed [Bill 20].

SEXUAL OFFENCES (AMENDMENT)

Mr. Robin Corbett, supported by Mrs. Helene Hayman, Mr. JackAshley, Miss Jo Richardson, Mr. Phillip Whitehead, Mr. Robert Kilroy-Silk, Mr. Alan Beith, Mrs. Ann Taylor, Mr. Bruce Grocott, Sir George Young, Mr. Bryan Gould, and Mr. Ken Weetch, presented a Bill to amend the law relating to rape: And the same was read the First time; and ordered to be read a Second time upon Friday 13th February and to be printed [Bill 21].

HOMES

Mr. David Lane, supported by Mr. W. Benyon, Mr. Andrew Bowden, Mrs. Lynda Chalker, Mr. Charles Irving, Mr. David Knox, Mr. Michael Morris, Mr. Tim Renton, Mr. Stephen Ross, and Mr. Nicholas Scott, presented a Bill to make provision for more homes for letting; to define the responsibility of local authorities for accommodation of the homeless; and for purposes connected therewith: And the same was read the First


time; and ordered to be read a Second time upon Friday 20th February and to be printed [Bill 22].

DIVORCE SCOTLAND

Mr. Iain MacCormack, supported by Mrs. Margaret Bain, Mr. Douglas Henderson, Mr. George Reid, Mr. Robin F. Cook, Mr. Robert Hughes, Mr. John P. Mackintosh, Dr. J. Dickson Mabon, Lord James Douglas-Hamilton, Mr. Alex Fletcher, Mr. Iain Sproat, and Mr. David Steel, presented a Bill to amend the law of Scotland relating to divorce and separation; to facilitate reconciliation of the parties in consistorial causes; to amend the law as to the power of the court to make orders relating to financial provision arising out of divorce and to settlements and other deals by a party to the marriage, and as to the power of the court to award aliment to spouses in actions for aliment; to abolish the oath of calumny; and for purposes connected with the matters aforesaid: And the same was read the First time; and ordered to be read a Second time upon Friday 27th February and to be printed [Bill 23].

ENGLISH DEVELOPMENT AGENCIES

Mr. John Horam, supported by Mr. Eric Heffer, Mr. Tom Urwin, Mr. Richard Crawshaw, Mr. Giles Radice, Mr. Alf Bates, Dr. John Cunningham, Mr. Leslie Spriggs, Mr. Dennis Canavan, Mr. Gordan Bagier, and Mr. Ian Wriggles-worth, presented a Bill to establish development agencies in England; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 5th March and to be printed [Bill 24].

INDUSTRIAL COMMON OWNERSHIP

Mr. David Watkins, supported by Mr. Arthur Blenkinsop, Mr. John Cartwright, Mr. Ivor Clemitson, Mr. Robert Edwards, Mr. Ioan Evans, Mr. Frank Hatton, Mr. Robert Hughes, Mr. Arthur Latham, Mr. Stanley Newens, Mr. George Rodgers, and Mr. Terry Walker, presented a Bill to further the development of enterprises owned and controlled by people working in them; to enable existing enterprises to change to such common ownership; to make provision for the tax liability of certain shareholders on the occasion of

such change; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 12th March and to be printed [Bill 25].

DOMESTIC VIOLENCE

Miss Jo Richardson, supported by Mr. Andrew Bennett, Mrs. Millie Miller, Mr. John Ovenden, Mrs. Audrey Wise, Mr. Eddie Loyden, Mrs. Ann Taylor, Mr. Tom Litterick, Mrs. Renée Short, Mr. John Garrett, Mrs. Maureen Colquhoun, and Mrs Gwyneth Dunwoody, presented a Bill to amend the law relating to matrimonial injunction; to provide the police with powers of arrest for the breach of injunction in cases of domestic violence; to provide for the obtaining of such injunction in the absence of a claim for damages; and to make further provision for the protection of the rights of victims of domestic violence: And the same was read the First time; and ordered to be read a Second time upon Friday, 13th February and to be printed [Bill 26].

LICENSING (AMENDMENT)

Mr. Mike Thomas, on behalf of Mr. Kenneth Clarke, supported by Mr. Roger Stott, Mr. Stephen Ross, Mr. Nicholas Winterton, Mr. Robin Corbett, Mr. Harry Lamborn, Mr. Tom Ellis, and Mr. John Cartwright, presented a Bill to extend the permitted hours of licensed premises and registered clubs; to enable children to enter parts of licensed premises and registered clubs during permitted hours: to repeal section 76 (5) of the Licensing Act 1964; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 27th February and to be printed [Bill 27].

REPRESENTATION OF THE PEOPLE (ARMED FORCES)

Mr. Cranley Onslow, supported by Mr. George Younger, Mr. Peter Blaker, Mr. Julian Critchley, Mr. Victor Goodhew, Mr. Philip Goodhart, Mr. Cyril D. Townsend, Mr. Michael Mates, Mr. Jerry Wiggin, and Mr. Geoffrey Johnson Smith, presented a Bill to make provision for the registration for electoral purposes of members of the armed forces: And the same was read the First time; and


ordered to be read a Second time upon Friday, 6th February and to be printed [Bill 28].

DETONATORS

Mr. Carol Mather, supported by Mr. Ian Gow, Mr. Neville Sandelson, Mr. Michael Mates, Mr. John Farr, Mr. James Molyneaux, Mr. Ivan Lawrence, and Mr. Jonathan Aitken, presented a Bill to regulate the production, distribution and use of detonators: And the same was read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed [Bill 29].

STOCK EXCHANGE (COMPLETION OF BARGAINS)

Mr. Michael Shersby, supported by Mr. R. Graham Page, Mr. John Davies, Mr. Peter Walker, Mr. Tim Renton, Mr. Michael Morris, Mr. Michael Neubert, Mr. Robert McCrindle, Mr. Anthony Nelson, Mr. F. P. Crowder, Mr. Neville Sandelson and Mr. Tony Durant, presented a Bill to amend and clarify the law relating to the transfer of securities and to companies with a view to simplifying the activities connected with the periodic completion of bargains made on stock exchanges; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 27th February and to be printed [Bill 30].

TELEVISION LICENSING (ESTABLISHMENTS FOR THE DEAF)

Mr. Michael McNair-Wilson, supported by Mrs. Jill Knight, Mr. Douglas Hurd, Mr. Richard Body, Mr. William Wilson, and Mr. David Penhaligon, presented a Bill to abolish television licence charges for establishments for the deaf: And the same was read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed [Bill 31].

CRUELTY TO ANIMALS ACT 1876 (AMENDMENT)

Mr. Ivor Stanbrook, supported by Mr. Joe Ashton, Mr. Alan Beith, Mr. Richard Body, Mr. F. A. Burden, Sir John Eden, Mr. John Farr, Miss Janet Fookes, Mr. Ron Lewis, Mr. Neil Martin, Mr. Donald Stewart and Mr. Phillip Whitehead, presented a Bill to amend the Cruelty to Animals Act 1876: And the same was

read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed. [Bill 32.]

INDUSTRIAL TRAINING (AMENDMENT)

Mr. Giles Radice, supported by Mr. Tom Urwin, Mr. David Watkins, Mr. John Horam, Mr. Phillip Whitehead, Miss Helene Hayman, Mr. Ian Wrigglesworth, and Dr. John Cunningham, presented a Bill to make further provision for industrial training: And the same was read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed. [Bill 33.]

EXPLOSIVES (AGE OF PURCHASE, &C.)

Mr. Gwilym Roberts, supported by Mr. James Johnson, Mr. George Rodgers, Mr. Brian Sedgemore, Mr. David Madel, Mr. Ivor Clemitson, Mr. John Ovenden, Mr. Richard Wainwright, Miss Janet Fookes, and Mr. Giles Shaw, presented a Bill to restrict further the sale to young persons of explosive substances, including fireworks, and to increase the penalties provided by sections 31 and 80 of the Explosives Act 1875: And the same was read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed. [Bill 34.]

CHRONICALLY SICK AND DISABLED PERSONS (AMENDMENT)

Mr. Jim Callaghan, supported by Mr. Jack Ashley, Mr. Carter-Jones, Mrs. Lynda Chalker, Miss Janet Fookes, Mrs. Millie Miller, Mr. Stephen Ross, Mr. Sydney Tierney, Mr. Terry Walker, Mr. David Young, and Mr. A. W. Stallard, presented a Bill to amend the Chronically Sick and Disabled Persons Act 1970; to provide access and facilities for disabled persons at newly built or extensively adapted places of employment in order to improve employment opportunities for disabled persons: And the same was read the First time; and ordered to be read a Second time upon Friday 13th February and to be printed. [Bill 35.]

FOOD AND DRUGS (CONTROL OF FOOD PREMISES)

Mr. Andrew Bowden, supported by Mr. Richard Luce, Mr. Churchill, Mr. John Horam, Mr. Walter Johnson, Mr. Ted Garrett, Mr. Alan Beith, and Mr. David Lane, presented a Bill to amend


the Food and Drugs Act 1955 by prohibiting the sale, etc., of food in certain circumstances: And the same was read the First time; and ordered to be read a Second time upon Friday 13th February and to be printed.—[Bill 36.]

THEATRES

Mr. David Crouch, supported by Mr. George Strauss, Mr. Patrick Cormack, Mr. Alan Beith, Mr. Andrew Faulds, Mrs. Lynda Chalker, Mrs. Renée Short, Mr. Tom Arnold, Mrs. Gwyneth Dunwoody, Mr. John Hannam, Mr. Ted Graham, and Mr. Michael Neubert, presented a Bill to establish a Theatres Trust for the better protection of theatres; to amend the law of town and country planning and of landlord and tenant in respect of theatres; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 13th February and to be printed [Bill 37].

REPRESENTATION OF THE PEOPLE (ELECTORS ON HOLIDAY)

Mr. Robert Hicks, on behalf of Mr. Michael Jopling, supported by Mr. Robert Hicks, Mr. Hamish Gray, Mr. Wyn Roberts, Mr. Richard Luce, Mr. Paul Hawkins, Mr. David Mudd, Mr. David Knox, Mr. Robert McCrindle, Mr. Robert Adley, and Dr. Keith Hampson, presented a Bill to enable electors who are away on holiday at the time of a Parliamentary election to vote by post or by proxy; to amend the law for correcting the register of electors; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed [Bill 38].

DANGEROUS WILD ANIMALS

Mr. Esmond Bulmer, on behalf of Mr. Peter Thomas, supported by Mr. Peter Temple-Morris, Mr. David Watkins, Mr. Emlyn Hooson, Dr. Colin Phipps, Mr. Cranley Onslow, Mr. Geraint Howells, Mr. Jeffrey Thomas, Mr. Colin Shepherd, and Mr. Michael Brotherton, presented a Bill to regulate the keeping of certain kinds of dangerous wild animals: And the same was read the First time; and ordered to be read a Second time upon Friday 6th February and to be printed [Bill 39].

EMPLOYMENT

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Coleman.]

3.39 p.m.

The Chancellor of the Exchequer (Mr. Denis Healey): The House paid special attention to unemployment when it debated the economic situation only three weeks ago. We are right to return to the subject today. No one on this side of the House can regard the present rate of unemployment as remotely tolerable or feel satisfied if the Government are leaving undone anything which they can reasonably do to bring the rate of unemployment down.
People of my age, on both sides of the House, were first propelled into politics during, and perhaps by, the world slump of the 1930s when the rate of unemployment in Britain never fell below 10 per cent., and on occasion topped 20 per cent. In November this year the level of unemployment in the United Kingdom on the November count reached 1,125,000 on the adjusted basis—a rate of 4·8 per cent. But in the North and in Wales the rate is a third as much again, and in Northern Ireland it has reached 8·8 per cent. Within these regions there are some towns or areas where it is higher still. In fact the level of unemployment is worse today than it has been for more than a generation.
It is small comfort that, even so, it is still only half as bad as it was in the thirties, or that now, as then, the root cause is a world recession, which has brought even higher levels of unemployment to many other countries. In the three months to September unemployment in West Germany was 93 per cent. higher than a year earlier, and in France 85 per cent. compared with 62 per cent. higher in the United Kingdom.
The fact that the recession hit us later and less hard than many of our neighbours owes much to the action which I took to increase demand in July and November last year. But unemployment in Britain has been made worse than it need have been because our inflation rate has been over twice the international average. Rising prices have aggravated the recession, undermining company finances, binding the hands four exporters, and


weakening investment. Worse still, our inflation rate, as I warned it would, has prevented me this year from countering the recession by a further stimulus to demand.
Since July, our fight against inflation has produced encouraging results. Last week's figures show that prices have risen during the six months to November at an annual rate of 14·9 per cent.—the smallest rise during any six-month period since October 1974. This compares with levels of up to 36 per cent. in the early summer. I can now be certain of meeting my Budget forecast that prices in the second half of this year will be rising at between 12 and 16 per cent. a year; and, subject always to unforeseen increases in our import prices, we should by the end of next year have the 12-month rise in prices down to single figures.
So there is real progress to report and more to expect. Nevertheless, our inflation rate is still well above that of our competitors and it may well remain higher right through next year. In present conditions, therefore, there is no scope for seeking to reduce the level of unemployment by a general reflation of domestic demand which is financed from the public purse.
Besides the constraints imposed by our rate of inflation, the balance-of-payments constraint also remains a real one, although here, too, there is progress to report. It looks as though our current deficit this year will be only half that of 1974. But the increase in output we expect next year is bound to increase our imports and the terms of trade are more likely to move against us than in our favour. So we shall be hard put to continue improving our balance of payments at the same rate as this year.
There is another constraint. The size of the public sector borrowing requirement is already as high as we can expect to finance without either printing money, as did the previous Government—[HON. MEMBERS: "Oh."]—Oh, yes—or raising interest rates and so choking off private investment and local authority house building.
I believe that these three constraints are now well understood. Indeed, I was heartened by the fact that those members of the TUC General Council whom I met

last week confirmed the view of the Trades Union Congress last September that there is no scope for a general demand reflation by Government action in current circumstances.
There are, however, many signs that the recession is bottoming out in Britain, as in other countries. Yesterday's index of industrial production adds colour to this view. But there is bound to be a lag of some months before an improvement in output is reflected in an improvement in employment. Meanwhile, we must look for the reflation of demand in Britain mainly to the stimulus of higher exports and investment. This means, above all, that our counter-inflation policies must be seen to work not only in the current wage round, but thereafter. Unless we can steadily reduce our rate of inflation, we shall not get the exports or investment that we need.
Success in the battle against inflation is the precondition of success in the battle against unemployment. Support for the Government's counter-inflation policy is not a concession made by the trade union movement to a Government of whose other objectives it happens to approve. It is the most fundamental interest of the trade unions themselves.
There is a second condition for our success in bringing down unemployment. As I think is now very widely recognised in all parties and all sections of our community, the key to improving our economic performance lies in the regeneration of our manufacturing industry. Eighty per cent. of our exports are manufactured goods. If our export drive falters in the face of world recovery, the prospects of employment will falter with it.
The House must face the disturbing fact that at present in several sectors of our manufacturing industry the problem is not deficient demand—there is demand to spare both at home and abroad. It is the failure of these sectors, above all, our motor car industry, to meet the demand which is already there. The British Leyland Motor Corporation lost 40,000 cars in the last six months through industrial disputes. For some popular British models there is now a two-months' waiting list. We cannot hope to get unemployment down so long as existing demand is unfulfilled through industrial disputes.
In the longer run, the prospects for employment depend critically on increasing our rate of investment. But it is no good expecting businessmen to invest if the return in productivity per unit of investment is far below that of our competitors abroad because of inefficient management or restrictive labour practices. Let me quote again some disturbing figures which by now should be familiar to the House. For each worker in industry British firms have been investing only two-thirds as much as German firms and only one-third as much as French firms. But a study in the West Midlands has shown that, on average, machines in the factories investigated stand idle for half the day, production workers spend only about half their time actually operating machines, and only one-fifth of the time it takes to process a product is actually spent in production.
We can return to full employment and maintain full employment over the years to come only if we can bring down our inflation rate to international levels and improve our industrial performance. Both of these are tasks in which the main responsibility will fall on ordinary men and women on both sides of industry, operating at the level of the individual plant. But the Government must accept the responsibility to create the conditions in which industry can thrive.
In the meantime, the Government have the inescapable responsibility for taking every possible action in every field which may help to protect employment and to deal with the worst consequences of the recession without setting at risk our prospects of a return to full employment as soon as possible. This Government accept that responsibility, too. Last September we took a series of such measures and I showed in our last debate how they were succeeding. I shall now describe a number of further decisions in this field.
First, we have taken a number of decisions which will have a rapid effect in increasing the number of people in work, at a very low cost to the Exchequer. Like similar measures which we announced on 24th September, they have the advantage over conventional demand reflation that they act much more quickly, they cost far less, and they can be withdrawn quickly and

easily when employment begins to rise again and they are no longer necessary. Since the September measures have already proved their value, we have decided to take further measures of this type.
In September we allocated £30 million to the Manpower Services Commission for a scheme to create useful short-term jobs for young people and others in areas of high unemployment. We expected that at its peak this scheme would provide the equivalent of 15,000 jobs lasting 12 months. The scheme has got off to a very fast start. Within a matter of two weeks after the first applications had been received, the first jobs were in operation. The Manpower Services Commission and its special job creation unit deserve our congratulations for this.
The response to the job creation programme has exceeded all expectations. Over 1,000 applications were received in the first two months requesting a total grant of over £16 million. So far 276 projects have been approved, providing over 4,000 jobs. The job creation programme gives priority to young people, since as a group they suffer disproportionately in a recession and can be demoralised for life by being out of work for a long period after leaving school.
I know that the job creation programme has been criticised for creating only temporary jobs. The programme is no substitute for economic recovery. It is designed simply to blunt the effects of the recession on those groups who suffer most in such times. The job creation programme is also criticised for the types of project it is supporting. Some of the work is unskilled and the training element may be limited. But if the job creation programme is to provide a range of opportunities for all types of ability, an element of unskilled work is inevitable. At first, most of the proposals coming forward were for unskilled work, but now more imaginative projects, which have been longer in preparation, are being received.
I can give the House some examples. In Barrow there is a scheme for revitalising a vandalised factory so that it may become a training centre. In Sunderland people are working on house renovation for the homeless and in Allerdale people are preparing a rugby pitch so that the


existing pitch may be used for a new factory. I think the House would regard such schemes as being of real value to the community as a whole, as well as to those who are saved from the demoralisation of unemployment by them.
Some of the criticism I have read is quite misplaced. For example, there has been criticism of a recycling scheme. This is an Oxfam-inspired scheme which had been run before. Pre-sorted recycle-able material is used and I understand that a profit of £2,000 per week is being made. The jobs are likely to become permanent.

Dr Keith Hampson: As this is an expensive scheme, which now looks as though it is to be increased, and as the right hon. Gentleman has admitted that these jobs are temporary and not related to future employment prospects or the creation of new skills, should not some of the money at least be put into the further education sector so that people can be trained full time and be ready for the economic upturn?

Mr. Healey: We are putting a lot of money into that sector. I shall be explaining in a moment what we are doing about training.—[Interruption.] The particular problem the hon. Gentleman has in mind—[Interruption.]

Mr. Speaker: Order. I hope that we may have a quiet debate.

Mr. Healey: As some projects may last rather less than 12 months, there is a risk that if the present rate of response continues, the scheme could pass its peak too quickly. The Manpower Services Commission believes that there are opportunities to extend the scheme rather more widely outside the development areas. We have, therefore, decided to increase the allocation by one-third, that is, by another £10 million. We shall be keeping the scheme under review.
On the basis of the original pattern of applications, many of the jobs would last less than 12 months. The original allocation for the scheme would have assisted over 25,000 people. If the same pattern continues, the increased allocation will help about 35,000 people, mostly young people. We also hope that many of these people will be able to go on, with help from the job creation unit

and its local action committees—and this answers the point raised by the hon. Member for Ripon (Dr. Hampson)—to a course of training or a permanent job.

Mr. Eric S. Heffer: Is my right hon. Friend aware that, although I support the idea of job creation schemes—which he has said would break the back of the school leavers' problems by Christmas—25 per cent. of all school leavers on Merseyside are still unemployed? This is a terribly serious problem. Does he realise that although these school leavers may be in work for short periods as a result of job creation schemes, they become unemployed later? Will not my right hon. Friend agree that this is not the way to deal with this problem?

Mr. Speaker: Order. Before the right hon. Gentleman answers his hon. Friend, I must appeal to the House. The hon. Member for Liverpool, Walton (Mr. Heffer) is seeking to catch my eye later in the debate. It is quite unfair to make interventions which are really arguments. I have the names of 50 right hon. and hon. Members who want to speak in this debate.

Mr. Healey: My hon. Friend is quite right. In his part of the country there is a serious and exceptionally grave problem which this scheme by itself is not capable of removing—although I believe my hon. Friend agrees that it assists. There are a number of other measures we are taking to which I shall now turn. If I could reinforce your plea, Mr. Speaker, it might be wiser if hon. Members were prepared to listen to all the measures I have to put to them and then, by all means, ask questions and put points of view in the debate. My right hon. Friend the Secretary of State for Employment will deal with any points I have not covered when he replies to the debate.
The temporary employment subsidy was introduced on 18th August in assisted areas and extended on 24th September to the whole of Great Britain. It provides a payment of £10 per week per worker for three months, renewable for a further three months, to employers who are prepared to suspend redundancies which would otherwise have taken place. This scheme, like job creation, has had a


quick response. It has already maintained over 9,000 jobs.
The present rules limit the subsidy to redundancies of 50 or more. We have decided to extend the scheme for the benefit of smaller firms and firms declaring smaller redundancies by extending it to redundancies of 25 or more. We estimate that this will raise the gross cost from £16 million to £19 million and the number of workers covered from 60,000 to 70,000.
My right hon. Friend the Secretary of State for Employment announced in July an extension of the community industry scheme from 2,000 to 3,000 places. This is a scheme designed to assist young people, especially the socially disadvantaged who find it hard to get or hold down a job. The extra 1,000 places have now been allocated and there is a demand for extra places and wider coverage.
We do not regard community industry essentially as a counter-cyclical scheme simply intended to provide work for unemployed young people. But clearly, in periods of recession, there is a case for expanding it temporarily. The Government have therefore decided to increase the number of places under the scheme by a further 1,000 until the end of the next financial year, when the scheme will taper back down to 3,000 places. The estimated extra cost will be £1·5 million in 1976–77, in addition to the existing provision of some £4 million.
All the schemes I have just mentioned are designed to provide jobs or save jobs in the immediate future—before the expected revival of our output and the recovery of world trade have been able to affect employment in Britain. We must also take steps to ensure that we have an adequate supply of trained men and women to meet the demand when recovery is in full swing.
In the Budget I allocated £50 million extra to the Manpower Services Commission, particularly for extra training and placement facilities. In July we provided £10 million more for training, community industry and the careers service. In August we introduced the temporary employment subsidy—£8 million—and in September we extended it by another £8 million. We introduced the recruitment subsidy for school leavers at a cost of £5

million, while job creation was introduced at a cost of £30 million. This will have been of some help in the constituency of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). We have provided another £25 million for training and mobility. This further instalment brings the total sum granted this year over and above the already expanding provision in the labour market programme to more than £150 million.
The Training Service Agency is expected to spend some £190 million on industrial training this year. Allowing for changes in the method of financing industrial training boards, this is a real increase of some 55 per cent. over expenditure in 1973–74. Numbers in training have increased by about 50 per cent. during this time. But we still have a long way to go before our training programme can compare with those in some other countries, particularly Sweden.
As I told the House in the debate on the Address, the Government are determined to organise a substantial further expansion of training facilities and to introduce further measures to assist the mobility of workers in time for the upturn. We shall be considering proposals for this purpose from the Manpower Services Commission early in the New Year.
The additional measures I have just announced, taken together, could help as many as 20,000 more people in particularly vulnerable sections of the labour force—the young, the socially deprived and those facing large-scale redundancies. The gross cost will be £15 million but, as I have pointed out before, the net cost to the Exchequer is much less in present circumstances than the gross cost because of the saving on social security payments and the gain in taxation. It may well be close to zero. Furthermore, in the case of community industry, as in the case of training, a large part of the cost comes back to us through a successful claim we have made to the EEC Social Fund. Corresponding measures will be introduced in Northern Ireland.

Mr. James Prior: Is the right hon. Gentleman saying that there is to be no extra money for training until after the Budget?

Mr. Healey: At the moment the Manpower Services Commission is not in a


position to put forward concrete proposals for further expenditure in this field, but we expect to receive proposals early in the New Year and to act upon them as soon as we receive them.
I now turn to the question of import controls. The Government have made it clear that they are prepared to consider imposing temporary controls on our imports in cases where sectors of industry, which would be perfectly viable in normal times, were threatened with extinction by excessive imports during the recession. We also asserted that such selective import controls should not be introduced where this was likely to provoke retaliation against British exports or to start an international trade war from which the poorest countries would suffer most.
These reservations were unanimously supported by the Labour Party conference last October—and with good reason. No country would suffer more than Britain from an international trade war, since we depend more on world trade than any of our competitors. That is why we cannot accept the proposal made in some quarters that we should seek to solve our problems through imposing import controls for a long period over a whole range of manufactured consumer goods.
We must recognise that the recession which affects so much of British industry is not peculiar to the United Kingdom, It affects all major western industrialised countries. All of them are suffering from under-employment and the under-utilisation of their industrial capacity. In these circumstances, action of a general nature by the United Kingdom would risk retaliation against our exports and in the process we could finish by dragging the country down into the sort of prolonged depression which it experienced in the 1930s.
It is for this reason that we have agreed with our major trading partners in the OECD pledge, at the Rambouillet meeting, and on other occasions, that we should seek rather to work our way out of the present recession through a co-ordinated programme of expansion. Inevitably, it must be the countries with a relatively strong balance of payments and new inflation rate who have to take the first steps. They have a strong interest in doing so, since if they fail to act as

necessary, countries with an adverse balance of payments will have to bring their foreign account into balance by restricting their imports, either through deflation, or by other means—either would be equally damaging to world trade. We agreed at Rambouillet that world recovery was now under way, although vigilance and adaptability will be required to prevent the recovery from faltering. I believe that the major industrial countries are now fully aware that, besides their national objectives, they have international responsibilities to which their policies must be adjusted.
It is against this background that we have decided to introduce some temporary further restraints on our imports in a limited number of areas. Other countries have taken similar action. Perhaps the most obvious problem area for Britain is textiles and clothing. Where imports from low cost sources have posed a major problem for our industries, a wide range of imports from these sources were already subject to restrictions at the beginning of this year. In the past few months the European Community has negotiated new arrangements and taken emergency action pending new agreements under the GATT Multi-Fibre Arrangement which has considerably extended the range of these restrictions.
By virtue of an agreement inside the Community for sharing the import burden, the future growth of the Community's textile imports is distributed so as to ensure that those member States which have taken most of the Community's imports in the past will take least of their growth in the future. This arrangement is particularly helpful to the United Kingdom since we have traditionally had a relatively liberal import regime.
The effect of the Community formula is that in many cases where the Community is accepting an annual growth of imports of 6 per cent. or higher, the United Kingdom share is a minimum of only Iper cent. For example, the overall rate of growth in the recently negotiated agreement with Hong Kong is 7 per cent. for the Community as a whole, but 2 per cent. in the United Kingdom, with growth rates of only ½per cent. for the most sensitive items.
So far the Community has reached restraint agreements with Hong Kong, South


Korea, Pakistan, India, Singapore, Malaysia and Macao, and Japan. Corresponding unilateral restrictions have been imposed on Taiwan, which is not a party to the MFA. Further agreements are still to be negotiated with Poland, Hungary, Rumania and a number of relatively minor suppliers in the developing world.
Where necessary the United Kingdom and other member States have through the Commission imposed emergency restrictions on imports where this can be justified under Article 3 of the MFA. In the case of the United Kingdom, such restrictions were imposed on various items of textiles and clothing from South Korea while negotiations with that country continued for a restraint agreement.
As a result, virtually all imports of textiles and clothing from low cost sources are now subject to control. In particular, whereas before this action only a small range of clothing was subject to restriction, now nearly all varieties of clothing from significant low cost sources are controlled.
I am well aware—and many hon. Members have put this point in recent months—that in certain areas there have been delays in concluding negotiations and as a result imports have markedly increased. But as the quotas are being established, the level of imports will be cut back. In some cases, where imports this year substantially exceeded the quotas we have now established—this applies to knitwear, trousers, women's skirts and blouses and some man-made fibre fabrics—no further imports have been licensed, and nor will they be licensed at all for the rest of this year, or during the whole of 1976. That means there will be very substantial reductions in imports in the coming year.

Mr. Dan Jones: Can we be told the percentage?

Mr. Healey: In many cases there will be no imports at all of those particular items where the imports in the current year have already exceeded the potential quantity, but it depends on the particular source and the particular item.

Mr. Leslie Spriggs: Can my right hon. Friend tell us something about the control of television tubes?

Mr. Healey: I am coming to that, if my hon. Friend will allow me to proceed.

I have more to say about textiles first.
Action of this kind under the Multi-Fibre Arrangement is still continuing. In the last few weeks, a new agreement has been reached with Korea which will result in new controls on imports from that country, and in the last few days an agreement has been reached with Japan. In the coming weeks the Community is embarking on negotiations with Latin America and subsequently with Eastern European suppliers.
The House will see that the United Kingdom textile industry stands to gain major benefits from the Multi-Fibre Arrangement. I believe these benefits in the main outweigh the limitations which it imposes on our freedom to cut back imports more drastically.
But there are some areas where we believe that further special measures, compatible with our international obligations, are needed to control imports of certain textile and clothing products. We are, first, taking steps to add to our existing restrictions on cotton yarn by placing quotas on cotton yarn from Spain. Spanish cotton yarn has hitherto been a small industry, and its exports to the United Kingdom were not restricted. But in recent years exports have risen sharply and have added considerably to the difficulties facing our yarn industry.
We are also anxious about certain textile imports from Portugal. The Community will soon start negotiations with Portugal aimed at agreement to restrict exports of a range of products to EEC markets, and in particular the United Kingdom market. I cannot forecast what the outcome of the negotiations will be. [Interruption.] If my hon. Friend the Member for Bolsover (Mr. Skinner) would keep his trap shut, the whole House would be grateful.

Mr. Denis Skinner: On a point of order, Mr. Speaker. Was that a parliamentary expression?

Mr. Speaker: I do not think that asking an hon. Member to shut up is unparliamentary. How it is precisely phrased is not really a matter for the Chair.

Mr. Skinner: Further to that point of order, Mr. Speaker. I am getting more than a little concerned about the use of language in the House. No doubt you


will have noticed yesterday that the Secretary of State for the Environment used the word "codswallop". Now the Chancellor of the Exchequer talks about keeping one's trap shut. I think that you should be doing something about this trend.

Mr. Speaker: One of my difficulties is that when the Chancellor of the Exchequer is standing where he does at the Dispatch Box, I cannot see whether the hon. Gentleman's trap is open or shut.

Mr. Healey: As I was saying before I was so agreeably interrupted, I cannot forecast what the outcome of the negotiations will be. I can, however, say that the discussions within the Community on the mandate for the negotiations are proceeding satisfactorily. But there are two areas—cotton yarn and woven manmade fibre fabrics—where we have come to the conclusion that we cannot wait until the negotiations are concluded.
We are therefore taking action in advance by imposing quota restrictions, with effect from midnight tonight. I hope that the Portuguese Government will understand that in taking this action we are not disregarding the coming negotiations. It is just that a situation has arisen in which we could not afford the risk of forestalling involved in delay.
The Government have also examined recent increases in imports of men's woollen suits from Eastern Europe, which our own clothing industry has—rightly—pointed out as a principal area of disruptive growth. We have requested immediate discussions with the main supplying countries with a view to agreeing levels of restraint on their exports to us of these products. I am confident that these negotiations will succeed.
We have also considered imports of leather footwear from Poland, Czechoslovakia and Romania. These countries have already undertaken, as my hon. Friend the Under-Secretary of State for Industry announced in May, to restrict their 1975 exports of men's leather footwear, excluding sandals, to a level between 5 and 10 per cent. below that on comparable exports in 1974. My right hon. Friend the Secretary of State for Trade is requesting these countries to continue this restraint on their exports throughout 1976 and to extend a similar voluntary

restraint on women's and children's leather footwear also.
I believe that these relatively limited measures will help sectors of the textile, clothing and footwear industries in the short term. The long-term future of the clothing industry is now better assured by the re-organisation scheme already announced by my right hon. Friend the Secretary of State for Industry.
The Government have given very careful consideration to whether restrictions on imports of colour television tubes were necessary to assist the manufacturers in the United Kingdom. Problems caused by the low prices of imported tubes should be substantially eased by the considerable increase in prices now being made by the main foreign suppliers of the most popular sized tube, but the key problem in this sector is that British industry has a capacity to make nearly 3 million tubes per annum, but has a domestic market of less than half that volume.
Imports have fallen from 1·5 million in 1973 to 1·3 million in 1974 and to some 900,000 in 1975. Most of the imported tubes are, however, of sizes and types not made in the United Kingdom. We could not introduce controls on these without causing serious harm to the United Kingdom manufacturers of colour television sets. Controls on tubes that are similar to those made in Britain would not make a sufficient impact on loading to improve the position of British manufacturers.
Nevertheless, my right hon. Friend the Secretary of State for Trade will be introducing surveillance licensing for imports of colour television tubes from all sources. In addition, surveillance licensing will apply to imports of colour and portable monochrome television sets. These measures will enable us to keep a close and detailed watch on import trends in case further action is required.
The Government have also considered whether to introduce import restrictions on foreign cars. This, however, is an area where the probability of retaliation is very substantial and where immense damage would be done to the British car industry if retaliation occurred. This is, of course, the reason why the Society of Motor Manufacturers and Traders has publicly announced its strong opposition to import controls. I must, moreover, remind the House that the demand for


some British cars at present far exceeds their output, and control of imports could well be met in the short run by a diversion of exports to the home market rather than by an increase in output. The expansion of our exports is, of course, as important as effective competition against imports.
The Government recognise their responsibility to do all they can to help British exporters. My right hon. Friend will be announcing tomorrow some new measures which are being taken for this purpose and which will thereby help to increase employment further.
Positive action is also needed in other areas to ensure that manufacturing industry can weather the present recession and compete more effectively when world demand revives. Accordingly, I have decided to make a number of changes to the hire-purchase and hiring terms controls which have been in force since December 1973. Some of these controls are holding back demand at a time when the industries concerned have ample spare capacity. The relaxations which I am proposing will provide a useful stimulus over the next few months with no cost to the taxpayer and no additions to the public sector borrowing requirement.
From tomorrow, controls will no longer apply to carpets and other floor coverings, furniture, kitchen and bathroom fittings, mattresses, space and central heating, prefabricated buildings, caravans and boats. For other industries, with the exception of cars, I have decided to relax the controls rather than to abolish them entirely, because beyond a certain point extra demand would be met not by increased home output but by increased imports. That is what happened when my predecessor made certain relaxations some time ago. Apart from the items I have mentioned, therefore, the minimum down-payment will be reduced from 33⅓ per cent. to 20 per cent. and the maximum repayment time will be increased from 24 months to 30 months. In parallel with this, the minimum advance rental payment for hired television sets and other goods still subject to hiring control will be reduced from 42 weeks to 26 weeks.
Given the difficulty which the United Kingdom car industry would face in meeting

any rapid increase in demand at this time and the current level of stocks of home-produced cars, the present limits of 33⅓ per cent. deposit and two years to pay will have to remain in force for the time being. I do, however, feel justified in making one small, but socially significant, relaxation to the existing hire-purchase controls on the sale of cars.
The Department of Health and Social Security will begin next year the payment of mobility allowances to the seriously disabled as an alternative to the provision of three-wheeled invalid vehicles, which are already exempt from hire-purchase controls. To allow the disabled to take proper advantage of these new allowances from 1st January, I am exempting from these controls the purchase of cars by those receiving a mobility allowance
When hire-purchase controls were reintroduced in 1973, the banks and finance houses were asked to observe similar restrictions on the terms of their lending to persons for the purchase of items covered by the controls. The Governor of the Bank of England, with my agreement, is therefore now indicating to them that they will be free to match these relaxations in the terms of their lending.
But I must emphasise that the intention of these measures is not to relax the general restraints on credit for persons, but to ease the position of certain selected industries which are important to the economy and which in many cases have excellent export records. The Governor is accordingly asking the banks and finance houses to continue to exercise restraint over the total of their lending to persons.
There is one other area where I believe the Government can be of some help to industry. Because of cash flow problems and falling demand, stocks held in manufacturing have been falling. There is a risk that in some areas these stocks may be too low for prompt action to meet export orders, and exports may therefore be frustrated. There is a further risk that, if the recovery in demand is at all rapid—and it may be—there may be a scramble for stocks, which would put up prices and pull in imports. This depends mainly on the commercial judgment of companies, and I hope they will bear in


mind the advantage of anticipating any rapid rise in world material prices in the upturn.
The Government are, however, taking certain steps to help. In the public sector the Government have agreed to a British Steel Corporation proposal to build a special counter-cyclical stockpile of steel at a cost of £70 million this financial year, and agreement has now been reached on the terms of Government financing. This stockbuilding should help both the Corporation with its immediate problem of under-utilisation of capacity and the Corporation's customers in the private sector by assuring their supplies when the recovery in demand takes place.
In the private sector the liquidity position of companies is beginning to improve and should be further improved next year, not least because of action taken by the Government last year. This should reduce the pressure on companies to reduce stocks because of cash flow problems. In addition, I understand that at present the banks are generally able and willing to provide additional finance to credit-worthy customers to finance increased working capital, including stocks and work in progress. I wish to make it clear that the banks should not feel inhibited about lending to manufacturing industry for this purpose and the Governor of the Bank of England is therefore restating the qualitative guidance to the banks and finance houses in this sense.
I come finally to the problem of investment, which is both the key to the improvement of our industrial performance over the next few years, and should be a major factor in accelerating recovery next year so as to reduce unemployment. As the House knows, I have already made £200 million available since April for accelerating industrial investment, particularly in the areas where it is most important to the overall performance of our industry. We need to be sure that when the upturn comes there is the capacity to meet it, and there is particular value in any measures we can take now to increase capacity and improve our industrial structure in the longer term.
The scheme for accelerating industrial investment which I announced in my Budget is an example. Although the existing allocation, twice increased, has

not yet been fully taken up, there is no present need to add to it further. But this scheme gives exceptional value for money, and I want to see it go as far as the traffic will bear. What it means is that any firm which has a viable investment project in its programme and which qualifies under the published criteria can look to the Government for financial help towards accelerating it. Firms which take up what this scheme offers will do good for themselves as well as for the economy and employment.
Indeed, in this as in so many other fields, though the Government can offer incentives, what happens in the end depends on the good sense of individual firms. In the past companies have often failed to invest at the bottom of a cycle, waiting instead until the peak of the upturn, so that their new capacity comes on stream just at the downturn of the next cycle, when it is least likely to be profitable. There are, of course, notable exceptions, particularly among the major companies such as ICI.
But I hope that on this occasion the likely trend of prices will reinforce what is in any case the real interest of British companies. It is likely to be a good deal cheaper for firms to rebuild their stocks and undertake new investment now than to wait until 1977, when world recovery may well have driven prices higher; and at present, as I have said, the money for this is readily available.
I do not claim that the measures I have outlined will in themselves produce a massive impact on the present level of unemployment. I claim that they will create jobs, or save jobs far more rapidly and far more cheaply than would be possible through any Government action to reflate demand. They do so by means which will strengthen our balance of payments rather than weaken it, and which will allow our attack on inflation to be pursued to ultimate success.

Mr. Nigel Lawson: rose—

Mr. Healey: Moreover, besides the immediate alleviation they offer to the problem of unemployment, they will strengthen our ability to take advantage of the surge in demand which will gather force in the coming year. Without these actions, the expected surge in demand might produce the same overheating in our economy in 1977 as we suffered in


1973, overheating which, as the House knows, lies at the root of many of the problems from which our economy is now suffering. For all these reasons I commend them to the House.

4.28 p.m.

Sir Geoffrey Howe: Those of us who have now had time to study the Report of the Central Policy Review Staff on the Motor Industry will have been struck by one phrase that is used about the present attitudes of people in the industry. Paragraph 7, in page 130, says that
we have been struck by the degree of insecurity and anxiety throughout the industry … concerning the industry's prospects. There is a growing concern about the future and at the same time a declining belief that anything can be done about it".
That anxiety and concern extends far beyond the motor industry and it will most certainly not have been reduced by yesterday's announcement, still less by the modest statement—to put it no higher than that—that the Chancellor has made today.
There is a disturbing feature, which gives me some cause for immediate concern, about the way in which the statement has been made. This debate has been heralded as the occasion when the Chancellor's Christmas package, of some moment and of some magnificence, was to be unveiled. That was promised for weeks in speech and in answer in the House, and in party political broadcasts.
I was therefore very concerned when the Chancellor was not disposed to make any announcement yesterday about the important matters that we were to debate today. That, after all, would have been in accordance with precedent. It is what was done in July 1966, and it was done by my right hon. Friend, now Lord Barber, in December 1973. It would have been courteous to the House, which would have been unusual for this Government. But in fact we see now why no such announcement in advance was made. The Government are so bereft of anything that could be put together as a contribution to their so-called economic strategy that, if today's announcement had been made yesterday, it would have evaporated by the time we came to today's debate.
The Chancellor of the Exchequer has scraped the barrel in every corner, and his announcement today falls so far short of expectations that the nation at least will be gravely disappointed by what he said.
I shall say a word or two about the measures themselves, but I am sure that that will not take a great deal of time. However, they need to be placed in the context of the Government's economic policy as a whole, so far as that can be identified.
I wish to make it clear that I shall be inviting my right hon. and hon. Friends to divide the House tonight against the Government's position in this matter. But we shall not be voting against the modest clutch of measures so far unveiled. Nor, as may be misrepresented hereafter, shall we be voting for higher unemployment. The truth, as some Government supporters are now beginning to realise, is that higher unemployment is still inescapable. We deplore the human consequences of that as much as anyone, but we shall vote against the Government to emphasise our judgment that they are overwhelmingly responsible for the nation's present difficulties and that so long as they remain in office there is no real prospect of a return to economic sanity. In other words, we shall record our firm view that the time has come for the Government to go.
There is something remarkably characteristic about the way in which this Government have: handled the whole problem of import controls. The pattern has become familiar as we have watched them over the months during which they have been in office.
Stage one is always a robust denunciation of the idea, characteristically by the Prime Minister.
As the months go on, stage two is the increasingly vocal advocacy of the opposite approach by back-stage members of this Government—the bosses of the trade unions, members of the Tribune Group, vocal as always in their advocacy of a siege economy—the entire performance generally orchestrated by the growing number of ministerial discards from the Government and led off-stage not only by Mr. Ron Hayward but also, inevitably, by the Secretary of State for Energy, as always leading a double life as kind of


player-manager, playing in one team whilst seeking to manage another and thereby enjoying the inestimable advantage of being able to score goals at both ends with the satisfaction of knowing that he has scored against his own side as well as for it.
Stage three, again very characteristically, is for Ministers to make speeches arguing both sides of the case, with the Foreign Secretary and the Chancellor of the Duchy of Lancaster preaching the virtues of free trade, with the Secretaries of State for Employment and Energy arguing in the opposite sense, and with the Chancellor of the Exchequer characteristically making increasingly Delphic utterances, confident that at the end of the day he will come down on whichever side looks like winning.
Stage four is reached when the Prime Minister finds some occasion to throw overboard his original commitment to virtue, always in such a way as to rouse totally false expectations in at least half of his party while putting the fear of God into the other half and, secondly, as to cause the widest possible offence and misunderstanding amongst other Governments upon whose sympathy and understanding, God knows, this Government depend. The Prime Minister ought to find the time to learn that he cannot go on dealing with Heads of State as he tried to do at Rambouillet with the same sly and devious techniques that he must have perfected over years of practice with the National Executive of the Labour Party.
Stage five is a long period of delay, dispute and struggle to reconcile the warring factions over the conflicting commitments of the Labour Party with the realities of economic life—[Interruplion.] The hon. Member for Penistone (Mr. Mendelson) may not like this, but it is a revealing insight into the way in which his party operates.
Meantime, while delay continues, those who might be affected by the measures take pre-emptive and evading action, which is why today half the stock of motor cars in the United Kingdom is said to consist of foreign imports, because people hastened to get motor cars behind restrictions that were never imposed.
Finally, we have the dénouement—the belated announcement of the Government's

conclusions. They are either a substantial set of measures, in which case they are wrong, or purely cosmetic measures that achieve nothing except the manifest disappointment of the expectations of many Government supporters and do wanton and unnecessary damage to international relations.
The measures announced today by the Chancellor of the Exchequer fall very close to that last pattern. The Government have recognised that any significant measures for import controls can do nothing but harm. They would invite retaliation, they would make inflation worse and, so far from providing a breathing space, they would encourage degeneration, promote inefficiency and eventually multiply the very unemployment that they are designed to prevent.
We are glad, on this issue at least, that the Government have listened to the advice of the Chancellor of the Duchy of Lancaster. We are glad that they have been able to come to conclusions that have been almost entirely arrived at within the scope of their existing obligations to the EEC. On textiles, the Multi-Fibre Arrangement remains the foundation of the present and of the future. On shoes, as I understand it, nothing further happens than an agreement to continue existing voluntary restraints. On television tubes, again, we are delighted that nothing further happens but sensible arrangements for surveillance. We are glad, too, that the Government have avoided the grave risk of the damage that would have arisen if they had attempted to introduce import controls for motor cars.
For all this sanity, much thanks. But there are still some areas where the representatives of certain trades have pressed the case for faster scrutiny of, specifically, anti-dumping measures. On this point, there is no sign of acceleration in the way that the Government will consider these proposals.
The Chancellor of the Exchequer said a few words about hire-purchase control. He is to be congratulated on not relaxing the terms except in the limited area of those receiving disability allowance. In relation to sales of motor cars, that would have been totally crazy. At a time when imports are soaring and yet cannot be controlled, and when there are long waiting lists for British cars, it would be wrong


to do anything to encourage the expansion of the market for cars by relaxing credit controls in that area.
In the other areas to which the right hon. Gentleman referred, again, there is a curious feature. In ordinary circumstances, there might have been some sense in relaxation, but this represents yet another round of tinkering, of the kind so strongly condemned in the CPRS Report on the motor industry. Our anxiety is that in areas involving consumer durables, especially electronics, there is at least a risk that imports will be increased by relaxation at this time and that savings on which the Government depend will also be reduced.
But there is another curious feature. Even in this area, the right hon. Gentleman's modest proposals for hire-purchase control demonstrate the erratic, haphazard way in which this Government have been handling the economy. What are the industries that have been singled out for special help? The Chancellor of the Exchequer says that special help will be given to, of all things, the caravan and boat building industries. Why are the industries in such difficulties? Because they were the industries, amongst others, selected by the Chancellor for the imposition of 25 per cent. VAT. The same is true of television rentals.
When the Government moved to introduce this so-called luxury tax of 25 per cent. VAT, they were warned by their own supporters that it would cause damage on the very trading estates on which many of the regions are acutely dependent. The hon. Member for Ormskirk (Mr. Kilroy-Silk) pointed out the tragedies which could befall the trading estate in his constituency, which is next door to that of the Prime Minister. Indeed, we have read in the last week or two of social disturbance and stress in Kirkby New Town, where 40 per cent. unemployment figures have been recorded. That is the consequences of the erratic management of the economy which led this Government to impose the absurdity of 25 per cent. VAT at that time.
Turning to the job protection measures which the Chancellor has announced, we are glad that the Government continue to accept the argument, which may not be wholly pure in intellectual terms but is true in practical terms, against large-scale

Keynesian reflation. Certainly some of the measures announced by the Chancellor are sensibly directed to removing some of the worst obstructions in the labour market. We are glad that he has been able to build on the Industrial Training Act with the establishment of the Training Services Agency—work which had been put in hand by my right hon. Friends over the years. In that respect, the right hon. Gentleman is to be congratulated.
There are many other foolish obstructions to the way in which the labour market works, for many of which this Government are responsible. There is the extent to which they have made it harder for workers to move to new jobs, by extending control over furnished lettings, thereby taking tens of thousands of houses off the market. There is the extension of municipal ownership and the blight of municipal redevelopment, taking hundreds of thousands of houses off the market. There is the refusal of many councils to permit the sub-letting of council houses and the application of Socialist doctrines preventing the sale of council houses.
All these matters make it more difficult for workers who are losing jobs in present circumstances to move to other places where jobs may still be available. All these matters are characteristic of the impact of Socialism on our economy, but, taken together, the measures suggested by the Chancellor represent a modest response to the situation.
This Government now bear the lion's share of responsibility for the present soaring level of unemployment, because they are without a strategy that offers any solution. Because they have got themselves into this situation, we intend to vote against them tonight. They have got themselves into this situation because of the extent to which their policies throughout—this has been the Chancellor's style again today—have been characterised by self-deception and false optimism.
The Prime Minister, speaking at a banquet at the Guildhall last year, said:
We have made clear"—
this is one of the euphoric observations to which he often commits himself at the Guildhall—
that we shall not seek to salve or to mitigate the problems which we face by beggar-myneighbour policies by hindering trade through


artificial restrictions on imports, nor by a lurch into a policy of deflation and unemployment.
Yet today the situation is precisely the opposite. Throughout the 12 months during which the Prime Minister has been making speeches in those terms, deflationary policies, on the Chancellor's admission, have been sustained inevitably and inescapably, and unemployment has risen inevitably and inescapably. The Chancellor is still seeking to take credit for the fact that the recession in this country is less severe, and has occurred later, than in other countries. But that, too, is part of the tragedy, because he helped, as he again sought to say this afternoon, to generate the continuance of inflation during the last year. His policies have now made further increases in unemployment unavoidable. Unemployment will continue to rise, and the Chancellor and the Government are responsible for it.
We have for too long had to face a policy of slither, shift and drift—a policy of false expectations and of the dramatic upturns to which the Chancellor still looks forward early in the new year. That policy has always involved—

Mr. Healey: The problems of success.

Sir G. Howe: The problems of success may sometimes be more creditable than the problems of absolute failure, which is what we have had from this Government. That policy has always involved running away from the truth.
The Report of the Central Policy Review Staff makes it clear that, beyond the modest measures recommended by the Chancellor, what is needed above all at the present time, if we are to get away from the prospect of economic decline, is leadership of a kind which the Government should be ready to give; leadership of a kind which must be candid, consistent and courageous. That is leadership of a kind that I fear we shall never have any hope of getting from this Government.
We have all, often enough perhaps, looked for easy answers to our economic problems, and we have all sometimes tended to think that we have found them. However, it is time for the Government to cease this endless round of self-deception. It is time for them to cease from constant looking for the answer that is

comfortable and, apparently, kind. We cannot go on, as they have been going on, pursuing soft option after soft option. We must have the courage to lead our people to face the truth. That, again, is the lesson of the CPRS Report.
Looking at that Report, one sees that the most important passage reads:
There is no disguising that they"—
the proposals
—"will involve a sizeable drop in the level of employment in the motor industry. However, the consequences of failure to bring about these changes will be a great deal more severe than are involved in the changes themselves. The industry could be reduced to a third of its present capacity, with direct employment in car manufacture at probably less than a third its present level and indirect employment in the component industry affected similarly.
Do the Government accept that diagnosis, or do they not? The Secretary of State for Scotland, when closing the debate yesterday, said that he had what he was pleased to call faith in the British motor industry. We would all be ready to have faith in management and workers in the British motor industry if the Government were prepared to face the implications of that diagnosis.
The lessons set out about the motor industry spread far more widely than that. Throughout the steel industry, throughout the coal industry, on British Railways, in the docks and in many other sectors of industry, the same lessons have to be learned. The lesson is that any attempt to save jobs today is the sure way to destroy still more jobs tomorrow. Only when the necessary structural changes can be effected can there be any prospect of returning to high and stable levels of employment. The Prime Minister and the Chancellor of the Exchequer know that repeated failure to promote the redeployment of resources and human skills can only lead eventually to economic collapse. That to our relief, was the message of the Chequers strategy. All that has now been wantonly cast away. The prime responsibility for that failure rests on the shoulders of the Government and, in particular, on the shoulders of the Prime Minister.
It is ironic to recall that at the beginning of this year the Prime Minister, in what was described as
a blunt warning … never … stated so clearly since Labour were returned to office


said:
With public capital, and an appropriate degree of public control involved
—that is ironic—
the Government could not justify to Parliament or to the taxpayer the subsidising of large factories which could pay their way but are failing to do so because of manifestly avoidable stoppages of production.
All those proud words have been blown away in the day-to-day decisions of recent weeks. We shall not get away from that sorry course unless we come back to certain simple but important propositions. First, new jobs can be won only if the private sector can again be offered the prospect of success. The Chancellor was preaching earlier about industry's failure to invest at the bottom of the cycle, but he could do worse than ask himself why that is. How can industry be expected to undertake investment in the face of all the other constraints that this Government continue to impose upon it?
The Bank of England quarterly report a week or two ago said that the real reason why investment could not be expected to turn up was that business had no prospect of profitability, and went on to spell out the reasons for this situation. It said that
despite last year's stock relief, the rate of profits appears to have fallen so low as to leave little incentive to new investment…. A change in the price code to allow more adequate profit margins would help to give firms some assurance that they will be permitted to rebuild profit margins on the scale required to provide a probability of reasonable profits on investment.
Until the Government recognise that truth, they will preach in vain for investment to be expanded. The private sector cannot hope for success as long as the Government continue to heap the entire burden of disinflation upon the private sector. There is a limit to a contracting private sector's capacity to maintain an ever-increasing amount of public expenditure as well as higher taxes. Substantial reductions in private expenditure, starting as soon as possible, are an unavoidable imperative for the restoration of economic prosperity.

Mr. Stanley Newens: Tell us where.

Sir G. Howe: The Cabinet is already discussing where the cuts should be. The

Chancellor has apparently secured the agreement of his colleagues to cuts of £3,000 million. In debate after debate we have spelt out where the cuts should be made. The Government should immediately abandon any further plans for nationalisation and tackle, sooner rather than later, the continuing growth of all subsidies. They will have to face the fact that they cannot go on overspending at the rate of £12,000 million. If reports are to be believed, the Chancellor is having some success in carrying this argument, uncomfortable though it is—not for this year, but for next year. These cuts are the only way of opening up the prospect of future jobs of real value coming into existence.
This continued profligacy in Government spending generates the fear that inflation will not be brought under control. It destroys the confidence on which future investment must depend and so destroys the prospect of new jobs. The Chancellor knows that perfectly well. In his Budget speech he said that a borrowing requirement of £10,000 million was too high by any standards and was inconsistent with his strategy. He set himself to reduce it, but we all know that he has failed by billions of pounds and that he has no prospect of doing better next year. He continues to defer action, waiting for that upturn to which he is looking forward so confidently. However, his continued extravagance will stifle that upturn before it even begins. This is the message driven home again and again by reports from the Bank of England and other people. The prospects of new jobs will continue to wither away until the Government accept that fact.
Until this House turns them out, Britain will be burdened with a Government who have lost whatever sense of direction they ever had. We are confronted with a deeply divided Government who are still taking the nation closer and closer to the abyss. If reports, which multiply in their frequency, are to be believed, there are, inside as well as outside the Cabinet, two fiercely contesting factions struggling for control of the economy while it continues to drift in a tragically wrong direction. On the one hand, we have the Tribune Group, which would take us God knows where, and, on the other, the Manifesto Group—the self-professed Social Democrats who


must be very near despair. Every victory they appear to gain for sanity is all too swiftly dashed from their hands by a sudden reversal of policy by the Cabinet.
How much longer are the so-called moderate supporters of this Government prepared to go on lending their support to policies of which they must, in their heart of hearts, deeply disapprove? When, if ever, will they be men enough to call a halt to the continued progress of this Government's economic policy in a totally wrong and disastrous direction? Until that happens we face the prospect of continued huff and bluster, and the Prime Minister will continue to preside, if that is the right word, over a continued slide towards disaster.
In his New Year message, the Prime Minister said:
By the end of the year, I believe Britain's economic prospects will be seen to have greatly improved … matched by the industrial and social strength which it is in our power now to assert, I believe we can, unitedly, make 1975 the year in which Britain began to climb back to success.
That is a pretty remarkable text to look back on with inflation at well over 25 per cent., with unemployment at well over the figure of 1 million which the Prime Minister and the Chancellor of the Exchequer promised us would never be reached—with the trade gap of this country as large as that of all OECD countries, and with public expenditure still totally out of control. There is even the prospect that this country's economic sovereignty will shortly shift—some may wish sooner than later—into the hands of the International Monetary Fund. Yet the scene appears as tranquil and euphoric to the Chancellor of the Exchequer as it does to the Prime Minister.
In another speech at the Guildhall this year, the Prime Minister said:
I have not, in all my years in Parliament, felt able to assert with more confidence than I do tonight my belief that, fortified by our growing economic strength, Great Britain's influence in the world, already high, will increase and our influence for good transcend anything in our historic past.
Those are remarkable words. If the Prime Minister believes that, he will believe anything. It is long past the time for the end of his disastrous and deceitful reign. It is long past the time for a Government who have produced today's packet of measures, which are of little relevance in

the present grave economic circumstances of this country, and long past the time for this destructive Government to be replaced. The sooner the better.

4.58 p.m.

Mr. Roy Hughes: After listening to the right hon. and learned Member for Surrey, East (Sir G. Howe) one can understand why South Wales always votes Labour so overwhelmingly. He should be ashamed of his speech. He and his party have no answer to the economic problems of this country.
I wish to express my sorrow at the passing of the hon. Member for Coventry, North-West (Mr. Edelman). I was his constituency secretary in 1959 and I knew him well. Like many hon. Members, he had his critics, but when intervening in political issues his timing was immaculate and he had an abundance of personal charm. His winning ways were quite overwhelming. He will be sadly missed.
The city that he represented for 31 years is now in deep economic trouble. Man-made fibres, machine tools and electrical products are all represented in a big way in Coventry. In addition, Coventry has experienced the long saga of the motor industry. There was the trouble over British Leyland and now the episode of Chrysler.
I intend to support the Government tonight, although I have had some heart-searching about it, as have many other hon. Members. I wish that the Government had exerted more control over the public money they are spending. Coventry will experience a great many redundancies to add to its difficulties. I have a little experience of the motor industry in that I spent 10 years in it before coming to the House. I feel in my bones that the Chrysler rescue operation will eventually be a success, despite the hard road that will have to be trodden in the immediate years ahead.
Coventry is a city that deserves to succeed. It is essentially classless in character and has no racial prejudice. I was annoyed yesterday by what the hon. Member for Banff (Mr. Watt)—a member of the Scottish National Party—said. He was prepared to see the whole Chrysler operation in Coventry go to the wall. As he spoke, I thought of some of the Scots citizens of Coventry. The Lord Mayor, Mr. Charles Ward, is a Scot to


his bones. My hon. Friend the Member for Coventry, North-East (Mr. Park) is a Glaswegian, and before coming to the House was the leader of the Chrysler shop stewards. Coventry has given employment to many people over the years. It is a great international city.

Mr. Douglas Crawford: rose—

Mr. Hughes: I will certainly give way to the hon. Gentleman, in the hope that he will repudiate his hon. Friend's statement.

Mr. Crawford: Will the hon. Gentleman explain why those Scotsmen are in Coventry? Is it not because they and their forebears could not get jobs in Scotland?

Mr. Hughes: They are there because of the capitalist system, against which the Labour Party has fought for so long. In that fight I hope that we shall have the full support of the Scottish National Party.
There are Press reports this morning—allegedly based on up-to-date figures—that Britain is over the worst of the recession. I hope that that is true. According to the October figures, industrial production shows faint signs of picking up, and there is more optimism in the air. Nevertheless, the realities are not quite so simple.
There is, for example, the matter of the British Steel Corporation's proposals for redundancies. Many thousands of people are involved, 13,000 in Wales. Secondly, there has been the accusation of "codswallop" uttered by the Secretary of State for the Environment, and remarks from the leader of the National Union of Railwaymen to the effect that the Secretary of State for the Environment is telling a pack of lies. Eventually the truth will emerge about what is to happen to the railways. Thirdly, there is the building trade which already has high employment and has yet to experience the full effect of local authority cuts.
I represent Newport, which is a highly industrialised town, perhaps a microcosm of the rest of industrial South Wales. Newport will certainly be affected by the three factors I have mentioned. There is also the question of Llanwern, on my doorstep, and getting into operation the

third blast furnace which involved expenditure of millions of pounds. I hope that flexibility and conciliation will prevail in the resumed negotiations to get this vital plant into full operation. Those principles should have prevailed much earlier. If that is not done now, when the upturn in the economy occurs and the car industry expands there will be a great shortage of sheet steel. The BSC will have to scour world markets for sheet steel and that, in turn, will be highly detrimental to our balance of payments and the British steel industry.
I wish to quote briefly from a letter I received recently from Mr. J. K. Stuart, the Secretary of the British Transport Docks Board:
British Transport Docks Bill—I am writing to inform you that it is the intention of the British Transport Docks Board to promote a private Bill under the above-mentioned title in the parliamentary Session 1975–76. The proposals in the Bill, in so far as they affect your constituency, are limited to seeking an extension of time for the acquisition of land required for certain docks which the Board are already authorised to construct at Newport namely, Works 7 to 13 inclusive authorised by Section 11 of the British Transport Docks Act 1967 (Newport-Uskmouth terminal).
That scheme, approved by Parliament in 1967, was shelved by the BSC. I appreciate that the letter does not commit the BSC, but if the go-ahead were given to the Docks Board for the scheme it could transform the scene at Llanwern works. The shelving of the scheme undermined morale at Llanwem. The problem there is basically insecurity amongst the people who have congregated in that area from many parts. This iron-ore terminal would make Llanwern into the fully integrated works which it needs to be. The principle of full employment is no longer the sacred cow it used to be, but for how long will the TUC accept an incomes policy when unemployment is rising?
To say the least, the Chancellor's package has erred on the side of caution. It is a case of too little, too late. The Government have certainly delayed for too long over import controls. It is alleged that there has been a dispute both inside the Government about these measures and with other Governments both in Western Europe and in America. We should not forget the IMF loan, and the question arises whether the IMF will accept the principle of import controls.
In its list the TUC mentioned such industries and products as cars, clothing, footwear, yarn, television tubes and electrical goods. This afternoon my right hon. Friend went a little way to meeting some of those demands, but I doubt whether the TUC, the trade unions, or the workers they represent will regard the measures as sufficient.
If the British Steel Corporation could get its plant working to full capacity a very strong case could then be made for curbing the current massive imports of steel. The Government should return to the principle of full employment in the economy, however stringent the measures which may be needed to bring about that state of affairs. That principle is enshrined in the Labour movement. There is no greater waste than the waste of human resources.

5.13 p.m.

Mr. Cyril Smith: I strongly supported the speech by the hon. Member for Newport (Mr. Hughes). When I listened to the right hon. and learned Member for Surrey, East (Sir G. Howe) I wondered whether we were having an economic debate or a debate on unemployment. I did not hear him put forward one solution or suggestion for dealing with the short-term situation as opposed to the long-term problem. Clearly, in the long-term we hope, whatever economy is agreed upon, that the country will be run on the basis of full employment.
I have always believed that one should deal with the facts as they are and not as one would like them to be. The facts are that there are more than 1¼ million people unemployed. I should have liked to hear constructive suggestions from the Opposition Front Bench about what it would be doing in this situation. The right hon. and learned Gentleman gave the impression that his party accepts the present situation and takes the view that there is nothing it can or would do about it. The impression was that its strategy would be to try to solve unemployment on a long-term basis and that it would accept in the short-term a figure of 1¼ million unemployed. However, the Conservatives must say what they mean by short term. Are they talking about 12 months or two years? For how long would they be prepared to tolerate unemployment at that level, and at what

point would they consider that unemployment had risen to an unacceptable level?
I suspect that the Government are now using unemployment as an economic weapon. I still have some doubts, because I know that that is basically foreign to their principles. Many of us, however, find the current level of unemployment unacceptable and extremely difficult to understand from a Labour Government. I am delighted at the Chancellor's measures, but they are too little and in many cases, certainly on textiles, they may be to late. Nevertheless, anything is better than nothing, and credit should be given where it is due for at least an attempt to deal with unemployment in the short term.
I am particularly interested in textiles. The industry will be disappointed that the Chancellor said nothing about strengthening the laws on dumping, about the possibility of the Government doing much more to prevent dumping, and of putting the onus of proof over dumping more on the country of origin than on the person who makes the complaint. The Chancellor talked about limiting the imports of blouses, skirts, trousers and certain other garments. I tried to get clarification of this during his speech, but I was unsuccessful. Is the limitation on the import of these items to apply to the made-up goods, or will the drafting be sufficiently tight to ensure that they do not come in on the basis of being three-quarters finished, with the last quarter being completed in this country? If the controls are to apply merely to the completely made-up garment, the restriction will be insufficient.
I hope that the Minister will say something about shirts. Are they included in the limitation provisions? The Chancellor may have mentioned them, but I did not hear him. He said that the Government were now negotiating with Portugal about a limitation of imports. May we be told how long the negotiations are likely to take? In the textile industry it is not unknown for negotiations to drag on for years, and certainly for perhaps eight or even 12 months. We may still be talking about negotiations with Portugal at Christmas 1976. The Prime Minister first made a statement about import controls last May. He said the Government were urgently considering the matter. It has taken seven months to reach even the


present stage, so I hope the negotiations will be speedy.
In summary, the textile package is a crumb of comfort. Half a loaf is better than none. We would have preferred a full loaf and would have liked some cycling of quotas over the long term. I hope that the Government are prepared to think along those lines.
On the job creation programme, I hope that the Government will consider the technical colleges. I am trying to put forward constructive points. I was a member of an education committee for 23 years and its chairman for seven. We have in our technical colleges huge amounts of capital equipment, some of the most superb machinery in the country, often far better than companies can afford. The Department of Employment and the Department of Education and Science should get together to see whether these capital resources, which have been paid for by the taxpayers and ratepayers, cannot be geared much more for retraining than just further education.
The country may be a little disappointed—I certainly was—that the Chancellor said nothing about the construction industry, which faces grave unemployment. It is difficult to reflate this industry when the Government are considering major public expenditure cuts, but it is ironically wrong that, at a time of grave housing shortage, about 200,000 construction workers should be drawing unemployment pay. It cannot be beyond the wit of man or Government to ensure that unemployment money paid to builders, bricklayers and plumbers is paid to them, instead, to build houses, I urge the Government seriously to consider this suggestion. If it means breaking rules, let us do so. If it is a question of unemployment pay coming out of one pocket and capital development going into another, surely it is not beyond the wit of the Government to devise some such formula. Instead of paying builders to be on the dole, we should pay them to build houses.
I have had the pleasure of starting a small company from scratch. As I have said before, I never describe myself as a "small business man". I describe myself as a business man with a small company. I have found building to be

one of the major problems. One can raise money for equipment, but one needs a building in which to start. When building workers are on the dole and we are looking for opportunities for long-term investment and for encouraging small industry in the long term, I urge the Government to consider whether unemployed building workers could be used to build small factories which, when the economy picks up, can be made available to small companies that want to start new industries. They could build them now, while the resources and the workers are available.
I have tried to be constructive. We are talking about the lives of men and women. Unemployment is degrading. It takes away the dignity of man. I have seen it in my own family; it is a terrible thing. Of course Ministers are not happy about the situation. They are human beings, after all—we may have our doubts about the humanity of some of them, as opposed to others—and I cannot believe that they are happy when over 1 million men and women are drawing unemployment pay.
That is why I have tried to address myself constructively to our problems, instead of indulging, as the right hon. and learned Member for Surrey, East did, in a long political tirade which made no contribution to a major problem. It is a major problem, not just of this Government but—what I consider far more important—of men and women, human souls, who are entitled to a proper living on God's earth.

5.25 p.m.

Mr. Eric S. Heffer: It is the custom for many hon. Members to say that they do not wish to follow the speech of the previous speaker, but I should like very much to follow that of the hon. Member for Rochdale (Mr. Smith).
This is a debate about unemployment. At the 1974 Labour Party conference the Prime Minister made a speech about unemployment which I think sums up the view of the entire Labour movement. He said:
None of us joined this party, devoted our lives to this party, to make it the party of unemployment. We reject that solution emphatically, decisively, once and for all.
I want to speak about the human side of unemployment. I was brought up, as


were many other hon. Members, during the years of the depression. I should like to tell the members of the Scottish National Party that one of the most profound experiences in my life happened when the Glasgow unemployed, supported by Englishmen who were also concerned about unemployment and the effects of the capitalist system, marched to London and stopped in my town on the way to explain to us the terrible crisis that they faced in Scotland.
Since then, I have become a Member of Parliament for Liverpool. In Liverpool at the moment, 10·6 per cent. of all workers, male and female, are unemployed. That means that in my constituency and other Merseyside constituencies there are whole streets of workers in which a quarter or more are unemployed. My hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) represents Kirkby, where 25 per cent. of male workers are unemployed.
It is interesting to note that the report by the police about Kirkby said that despite all the problems of unemployment there was no racial or religious conflict there. I draw that to the attention of the SNP. The problems that we face on Merseyside are just as great as those in Scotland. I do not want to boast about that, because it is a tragic fact. But these matters are not a question of nationality. Some English areas suffer just as much from unemployment and slum clearance problems as does Scotland or Wales.

Mr. Douglas Henderson: rose—

Mr. Heffer: No, I shall not give way.

Mr. Henderson: The hon. Gentleman is making attacks. Will he give way?

Mr. Heffer: In a moment.
This is not a question of nationality—

Mr. Henderson: Who said it was?

Mr. Heffer: It is simply that the capitalist system under which we live, whether in Scotland, Wales or England, has failed this nation. That is the real problem.

Mr. Henderson: I am disappointed that the hon. Gentleman should seek to make this strong anti-Scottish attack tonight. Does he accept that we are talking

about a subject concerned not with racialism but with political sovereignty? We believe that Scotland should be compared not to some regions in England but to other small countries in Europe, such as Norway, Sweden, Denmark, Austria and Switzerland, which have had consistently lower rates—

Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Gentleman has made his point.

Mr. Heffer: The hon. Gentleman has proved precisely the point that I was trying to make and I have no further comment to make on that matter. Whether a person is Scottish or Welsh, or comes from certain regions of England or Northern Ireland, he faces the same dreadful problem of the growth of unemployment, which must be dealt with by the policies of central Government.
I want to deal with the question of unemployment in a personal sense. I do not know how many hon. Members have faced unemployment. I used to work in the construction industry, and the terrors of unemployment were never quite the same for me as they were for workers in a more stable industry. The construction industry was not stable, so I worked for a period and when the contract was completed, I found myself out of work. I then hoped that another job would come along. The shipbuilding and ship repair industry is similar to the construction industry. We did not have quite the same fear of unemployment, because it was part of our lives.
It was never a joke to walk the streets of Liverpool as I did, sometimes for as long as a month, seeking employment. At that stage, despite all our problems, we knew that something would turn up. Now, nothing turns up—that is the difference. There is no hope for workers.
In the construction industry there are now 170,000 unemployed persons. I take the point made by the hon. Member for Rochdale, because in my area 13,000 construction workers are unemployed. Nearly 4,000 of them are highly skilled. At the same time we have a housing waiting list of about 22,000. It is ridiculous and criminal that those workers should be unemployed and that at the same time people should come to my interviews on Saturday mornings and ask


"What can you do, Mr. Heffer, to help me get a house, because I am living with my mother-in-law and we are overcrowded?" I am told that problems arise and people are having nervous breakdowns because of the housing stress and problems.

Mr. Esmond Bulmer: Will the hon. Gentleman tell the House where the building workers to whom he has just referred were recently employed, and why their employment ceased?

Mr. Heffer: Some of them have not been employed for between nine months and a year, unforunately. It would be difficult for me to say where they were recently employed when they have had no recent employment.
Many workers who wish to move to other parts of the country are unable to do so, despite Government assistance which I know is forthcoming, because no accommodation can be provided for them. It is all very well to talk about transferring the unemployed elsewhere, but it is useless unless accommodation can be provided for them. That is a great problem.
I get rather emotional about the question of unemployment, because I have suffered from it. During a period of full employment I once spent three months out of work. At the end of three months I began to think that it was I who was responsible and at fault, not the system. A person may be the best tradesman going, but in the end he loses confidence. I spent seven years as an apprentice, and I believe that I was always a first-class craftsman. I was never sacked for being a bad craftsman. I may have been sacked for being a nuisance and a trade unionist. I can hardly look some of my building industry comrades in the face at present. I say that as a member of the Labour Party who supports a Labour Government on the basis of what the Prime Minister said at the 1974 Labour Party conference.
What we have done to date is simply not good enough. I am not given to quoting or supporting much of what is written in the various national newspapers, but I agree with an article that was published in The Guardian in September, when my right hon. Friend the

Secretary of State introduced the measures. The article said that the measures were more symbolic than substantive.

Mr. Henderson: Cosmetic.

Mr. Heffer: That is another way of putting it. We are told that youngsters in areas such as mine have been offered £30 million. We could use that money in one day on Merseyside and still not solve the problem. Many jobs are created which last for a few months, and because they are blind alley jobs those who do them are not given any training. They have to go on the dole, and the position is worse for them than if they had not even had the job.

Mr. Crawford: It is your Government.

Mr. Heffer: The hon. Gentleman does not need to tell me that it is my Government—I know that. That is why I am talking to them in this way. I do not need lessons from the hon. Gentleman on how to talk to my hon. Friends about Government policy.

Mr. Henderson: You do.

Mr. Heffer: We cannot solve this problem by that type of action. We need something more substantive. [HON. MEMBERS: "Hear, hear."] Before hon. Gentlemen get too enthusiastic about that statement, let me turn to the arguments advanced by the Opposition.
The arguments put forward by hon. Gentlemen are remarkable. The right hon. Lady the Leader of the Opposition, the right hon. Member for Leeds, North-East (Sir K. Joseph) and, today, the right hon. and learned Member for Surrey, East (Sir G. Howe) have tried to convince us that the problems are all due to a Labour Government who are responsible for the growth in unemployment. We are told that we have too much Socialism.

Mr. Nicholas Ridley: That is quite right.

Mr. Heffer: The Opposition say that if we did not have Socialism we should not have unemployment. I argue that the crimes of the capitalist system are being blamed on the Labour Government, and if the Labour Government are guilty of a crime it is that they are not Socialistic enough and are not dealing with the crisis by working towards a planned economy.

Mr. Bob Cryer: Does my hon. Friend accept that in the package of measures that has been announced today there is £70 million for stockpiling by the British Steel Corporation? Does he accept that the Corporation sought that money in the City, among the private owners of capital, and that those private owners were so concerned about the unemployed, or the potential unemployed, in the steel industry that they refused to support the scheme? Once again, it comes back to the social responsibility of a Labour Government.

Mr. Heffer: My hon. Friend is absolutely right, in the sense that in the last analysis Governments have to take responsibility.
Let us consider the Chrysler situation. This is an important matter. If I have a criticism of the way in which my right hon. Friend and hon Friends in the Government have handled it, it is not of the fact that they are trying to save jobs. I shall support the Government tonight and I shall vote for saving the jobs at Linwood and Coventry, and elsewhere. I regret that some jobs will have to go in both places, because I think that we could have dealt with this matter differently. We should have brought that company into complete Government ownership, merging it with British Leyland, so that when we did get an upturn in the economy—which everyone convinces me will come, although I am not absolutely certain, under our system, that it will—we could rationalise it and lay the basis for a really sound and viable motor vehicle industry in this country—and not necessarily only a motor car industry.
That is what we could have done. That is what the Labour Party, in its manifesto and particularly in its programme, has suggested we should do in dealing with this sort of problem. Unfortunately, what we have is the worst of both worlds. We have neither one thing nor the other. We are just bolstering up a multinational company, with no guarantees whatsoever that at the end of the operation it still will not leave this country and our workers flat, so that the Government will have to go in and take it over. That is the problem. However, that does not lead me to vote against the Government, or to abstain, because

if it means saving jobs I shall vote for the saving of jobs, although I may not necessarily agree with the way in which the matter has been dealt with by my right hon. and hon. Friends.
I think that the Secretary of State for Industry originally argued on the basis of the Chequers statement, which is very much in line with what the Conservative Opposition want—that is, that we do not save the so-called "lame ducks". That was the way in which the Government started off. But the political and economic realities led them to do something else. Then, instead of accepting the Benn-Heffery line they accepted something in between, which was the worst of all worlds and not in line with what the Labour Party, its National Executive Committee or its conference wanted. However, I shall support the Government in relation to saving jobs.
I have spoken for longer than I intended, although I have had a number of interruptions. I tell my hon. Friends that the measures announced by the Chancellor today are to be welcomed. I must not go too far on this subject. One can hardly call it reflation, but it is a step towards reflationary measures. Today's measures will be helpful in a minor way. However, we need to go much further. I see my right hon. Friend the Secretary of State for Employment nodding at that. I am delighted.

Mr. Henderson: He always nods.

Mr. Heffer: No, he does not. If he does not agree, he does not nod. I have known my right hon. Friend long enough to know that. I have had many an argument with him, and he certainly does not nod if he does not agree with what one says.
We must go much further than what has been announced today. The Early-Day Motion in the name of my hon. Friend the Member for Harlow (Mr. Newens) gives the positive solutions to the problem of unemployment. I believe that we must have further import controls. In our last debate on this subject I argued for a 15 per cent. import control right across the board for a limited period. We may have to be as drastic as that. I know that it would upset many people and that there are arguments about retaliation. However, one knows that in other countries this sort of policy is being


carried out and similar measures are being taken. Many countries are now imposing import controls, some of which are up to 15 per cent., without our appreciating that it is happening.
We must stop the outflow of capital and make certain that it is used in the United Kingdom, in the interests of its people.
In the construction industry and other similar industries we must have schemes that will create jobs in a positive sense. There must be greatly increased support for the construction industry, because that is the one industry that is the barometer of our economy.

Mr. Alan Clark: Will the hon. Gentleman give way?

Mr. Deputy Speaker: Order. About 50 hon. Members wish to speak in the debate, and the hon. Member for Liverpool, Walton (Mr. Heffer) has been speaking for 23 minutes. It will make it difficult for other hon. Members if there are interruptions.

Mr. Heffer: I apologise, Mr. Deputy Speaker. I have been interrupted. I do not wish to give way, although I do not wish to be discourteous. Therefore, I shall conclude my remarks. I could have said much more, but I shall not do so.
I ask my hon. Friends to read very carefully the arguments developed in the Early-Day Motion in the name of my hon. Friend the Member for Harlow. We believe that that is the alternative and the way to deal with the immediate situation.
Finally, I say that unless we introduce measures to bring unemployment down to below 1 million in the early part of next year, instead of the Labour Party being accepted as the party of full employment we shall have failed our own people, and we shall never be forgiven for it.

5.48 p.m.

Mr. Peter Walker: The significant thing about the debate is that, mainly from the Back Benches, including the speech of the hon. Member for Liverpool, Walton (Mr. Heffer), there has been a passionate desire to see that the Government, and, I would hope, both sides of the House, return to the basic commitment of trying to maintain full employment.
In the 15 years during which I have been privileged to be a Member of this House, under all Governments, Labour and Conservative, at times unemployment has risen. The Opposition of the day have normally been very critical of the rise in unemployment that has occurred, both sides of the House have demanded policies of Governments and, frequently, the unemployment problem has been tackled and unemployment has begun to drop. What frightens me about the atmosphere of the debate today, in terms both of the Chancellor's speech and, to some degree, the speeches from the Opposition side of the House, is a near acceptance of the view that present levels of unemployment, or even higher levels, may be acceptable.

Mr. E. Fernyhough: Nonsense.

Mr. Walker: I am delighted to hear it. They are totally unacceptable. But, on analysis, one can hardly call the Chancellor's statements and policies the statements and policies of a Chancellor who is passionately concerned to get the unemployment figure down.
There are distinct areas of unemployment for which there is no particular action. I wish to speak of two such areas. Unemployment has doubled over two years. As the Chancellor said, it is at as high a level as it has been for a generation. In one of the areas of which I wish to speak it has trebled over two years and in the other it has quadrupled.
The first area to which I refer is the Midland region, where unemloyment has increased at a faster pace than in any other region—far faster than in Scotland, Wales, the North-East or the North-West. Similarly, the number of vacancies in the Midlands has fallen faster than in any other region. Whereas two years ago there were more vacancies than jobs, today there are 12 people unemployed for every registered vacancy. What concerns me is that there is no indication that the Government are very concerned about the Midlands. When the matter was raised yesterday the Secretary of State for Industry said that when things improve there is a far faster revival in the Midlands. Today, although he mentioned some regions, the Chancellor did not refer to the Midlands at all.
Whatever the pros and cons of the Chrysler decision, it has basically been decided that the brunt of the redundancies will fall on the Midlands. The Midlands is not an area in which unemployment rises and falls quickly. For most of the past 25 years it has enjoyed consistent full employment. That has disappeared.
When he first became a Minister at the Department of Industry the hon. Member for Liverpool, Walton understandably pursued the positive regional policies in which he believed. I think that he will agree that I, at both the Department of the Environment and the Department of Trade and Industry, believed in and pursued such policies. Looking at the situation of prosperity in the Midlands at that time, the hon. Gentleman toughened up the whole industrial development certificate policy as it applied to the Midlands. I do not criticise him for that decision, but I believe that if he were in the same position today, in spite of his interest in the North-West he would be very concerned about the levels of unemployment in the Midlands. I hope that the Secretary of State for Employment will examine what is happening.
There has been a massive increase in unemployment in the construction industry in the Midlands, as throughout the country. In 1971, when I had responsibilities for the construction industry, its level of unemployment was high. We introduced a range of measures that got large numbers of men back to work. I realise that the cry now will be that such measures would mean an increase in public expenditure, and so there will be no reintroduction of the improvement grants that modernised every prewar council house in the North-East. I see no economic advantage in thousands of blicklayers, plumbers and electricians being unemployed when the country has massive construction needs.
I understand the public expenditure argument, but the construction industry brings in no great flow of imports. Getting it back to work would substantially improve the atmosphere and cut out all the unemployment benefits and social security payments to the men involved. There would be a considerable net benefit. I hope that the Government will take action in this regard for the Midlands and other areas.
The second area in which unemployment has quadrupled is that not of a region but of a group of people. I hope that the Government will give some thought to the problem of the West Indian community. Unemployment among the West Indians has risen fourfold in the past two years—from 3,000 to 14,000. Most of those concerned are young people. That official figure is inaccurate, because the last survey by the Department of Employment showed that only half the young West Indians registered for unemployment benefit. The true figure is probably double 14,000.
The Chancellor mentioned various programmes. There are the urban aid programme of the Home Office, various facilities provided by the Department of the Environment and the work creation programme of the Department of Employment, but none of those has made any impact on that community. The country cannot complain about the crime rate of young West Indians if they not only have bad housing but their employment prospects are much worse than those of any other section of the community. I hope that the Government will try to introduce a co-ordinated programme in that sphere.

Mr. John Page: My right hon. Friend is making an interesting, thoughtful and original speech. On the question of unemployment among West Indian young people, is it not a fact that they are probably the least qualified and least employable? Does that not lead my right hon. Friend's logical thinking to the conclusion that there should be a restriction on further immigration of people from the West Indies and the Asian continent?

Mr. Walker: I do not think that the flow of people from the West Indies is part of the problem. The size of the West Indian population is such that if we applied the necessary resources it would be easy to deal with their problems, and we should do it. This is a unique opportunity to do something in race relations that would be an example to the rest of the world
The basic strategy did not cone into the Chancellor's analysis. What has gone wrong in this Government's period in office is illustrated by the fact that after 19 months we are producing less than


during the three-day working week, and the volume of our exports is less than during that period. On the latest figures, we are now producing 5 per cent. less and paying ourselves 51 per cent. more for doing it than we were when the Government came to power 19 months ago. One cannot, over a 19-months period, pay people 51 per cent. more and have them turn out 5 per cent. less without creating massive problems of unemployment and inflation, and all that goes with them.
That is why in my judgment, and in the Government's judgment, it was vital to introduce some form of incomes policy. The dilemma facing the Government is that, having had the co-operation of the unions on a £6-a-week incomes policy, they know that £6 a week is in itself disastrously inflationary. Let us take public sector spending. The hon. Member for Walton mentioned various schemes that he would like to see. He mentioned the pitiful £70 million resulting from the Chancellor's statement today. We should recognise that an extra £6 per week for each employee in the public sector has meant £900 million a year more in local government pay, £600 million more in the nationalised industries and £600 million more in central Government expenditure—a total of £2,100 million. It has meant an extra expenditure of £700 million on public sector pensions, bringing the total to £2,800 million in one year. With production dropping, we cannot pay that amount of extra money and maintain full employment and survive.
I turn to the prospects for next year. Britain is the most de-stocked country in Western Europe. The improvement in our balance of payments has been primarily due to an increase in the price of exports—though the volume has gone down—and a drop in both prices and volume of imports. I hope that the House realises where that drop has taken place. On the figures of the past six months, £1,112 million of the drop, at an annual rate, is in raw materials and £430 million is in machinery. In regard to food, tobacco, beverages, motor vehicles and consumer goods there has not been a drop in our import position; there has been an increase amounting to £180 million.
When world trade picks up we shall need to re-stock, and we shall have to do so at increased prices. Those increased prices will create an enormous burden on our balance of payments. It will not be an atmosphere in which we shall be able to borrow easily or expand easily. The reality that must be faced by the Government is that, having experienced a period of 19 months when we have seen a 51 per cent. increase in incomes and a 5 per cent. drop in production, the penalty will be paid in unemployment for some time to come.

6.00 p.m.

Mr. J. M. Craigen: I, too, am very much concerned about what the Government intend to do about prospects for next year. This afternoon my right hon. Friend the Chancellor of the Exchequer presented the House with a modest package of proposals, no doubt designed to help us through the present winter, but what will happen when spring arrives?
My right hon. Friend spent some time educating us about the contraints under which he is working in terms of import controls and how overseas markets will react. I believe that the Government will have to show a great deal more leader-ship in terms of our domestic economy. It frightens me to see the extent to which this country is still importing—and I do not refer to raw materials alone. I refer to our imports of finished manufactured goods, many of which should be manufactured in this country.
We are dealing with the subject of import substitution. How can we organise our domestic economy so that we may produce for ourselves many of those commodities we now find it necessary to import? When people go to the shops and buy foreign goods, they do not regard themselves as consumer fifth columnists. They are buying goods with price, quality and availability in mind.
Yesterday Parliament experienced a rail lobby. One of the topics that came up in discussion with railway men from the workshops was the fact that our rail-way workshops do not have many of the spare parts that are necessary. The Government are one of the biggest purchasers of goods in the country, and we have only to look at purchases in the nationalised industries and in local


government to see how much purchasing power there is in those spheres. Can those organisations put their hands on their hearts and say that by far the greatest proportion of their purchases is manufactured in this country?
The relaxation of hire-purchase controls no doubt will help certain industries to overcome the present slackening in demand, but I wonder whether the Chancellor has considered the introduction of preferential rates of hire purchase for British-made cars. The same instrument of selective hire-purchase controls could be applied to some domestic appliance industries.
Surely what is at stake is the whole concept of full employment—a concept that has been accepted in all parts of the House since the end of the war. It is the Government's job to ensure the highest level of employment. It has been a post-war responsibility. Before the war a full employment policy was not an accepted governmental responsibility. I do not want to see any lowering of confidence, in our present situation through too much Micawberism. We face a massive problem of redeployment. I would equate the situation almost with what happened when just after the war we moved from a war-time economy to a reconstruction economy. At that time millions of people were involved in the necessary resettlement and the switch to a strong peace-time economy.
The United Kingdom faces awesome prospects in terms of employment. This is true of the steel industry, the railways, the Post Office and also of local government and the private sector. Despite all that has been said about the ideology of nationalising the shipbuilding industry, that industry is not in a healthy state. One or two speakers have already referred to the considerable unemployment in the construction industry at a time when we need more houses in many areas and when there is an obvious demand for new building. One of the problems has been the constant chopping and changing in the demand situation, which must make it difficult for many managements to know where they stand.
Many people would like to see expanded facilities in training centres and further education colleges. I strongly favour the idea of training centres and

further education colleges taking on a bigger and more important rôle. But we must not forget that those who emerge from those colleges and centres will be looking for jobs in the skills that they have acquired. That is also true of those who have been through schools, colleges and universities. Surely there should be a much closer linking of our education, employment and training services, so that we are geared to the labour market requirements we seek to establish.
The figures given by the Chancellor of the Exchequer appear to show that the job creation scheme is faring much better than I thought. In some areas we seem to be scrabbling around for projects. The community industry scheme also is doing a useful job in its own way. That scheme is filling a great need in respect of those who would often find it difficult to get an initial start in employment.
It is significant that the debate was opened by the Chancellor of the Exchequer and later tonight will be closed by my right hon. Friend the Secretary of State for Employment. I hope that this is the beginning of a new and strong relationship between those two Departments. Officials of the Department of Employment will need to "walk tall" in the Treasury. Unfortunately, they have had their legs cut off in the last few years because a number of organisations that were once their responsibility have now been hived off to quasi-governmental institutions. This arose as a result of the change made by the previous Conservative Government in the whole system of the industrial training boards.
I hope that when he replies tonight my right hon. Friend the Secretary of State for Employment will spell out some of the long-term proposals coming from St. James's Square for coping with the enormous structural changes that will take place in the labour market—not only in the older, productive industries, but also in the non-productive sectors of the economy.
Many who are engaged in what is regarded as service work are performing a useful community job. Newspapers like the Sunday Times have recently spelt out the tremendous transformation that has taken place in the past 10 years, with the great shift from manufacturing to service industries. The task facing my


right hon. Friend the Secretary of State for Employment is great.

6.11 p.m.

Mr. Douglas Crawford: There is no need to beat about the bush when speaking of unemployment in Scotland. There is no point in saying, as the hon. Member for Liver-pool, Walton (Mr. Heffer) has said, that Scotland is just another region. We are not a region; we are a nation. Just because the unemployment differential between Great Britain and Scotland is narrowing is no reason why we should fall down on our knees and thank the Government and the Chancellor. The gap is narrowing not because unemployment is reducing in Scotland, but because it is rising in Great Britain.
We in the Scottish National Party do not accept that the comparison should be between Scotland and regions of the United Kingdom. As my hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) pointed out in an intervention earlier, other small countries in Europe have much lower unemployment rates than we in Scotland. Our unemployment is now over 127,000, which is a rate of about 5·9 per cent.
I received a reply from the Department of Employment which said that unemployment in Sweden last August was 1·2 per cent., representing 67,000 people; in Fin-land it was 2 per cent., or 48,000 people; in Austria it was 1·3 per cent., or 36,000 people; and in Norway 1·1 per cent., or 17,400 people. Scotland, which is not dissimilar in size, has 127,000 unemployed. The House must realise that Scotland is no longer prepared to be the poor relation of the United Kingdom.
We in the SNP are naturally sorry for those in the Midlands, in the North-West, the North-East, the South-West and else-where who are unemployed.
Unemployment is a human condition which brings human misery. That is why we are sorry for the unemployed. We are sorry not just because it is in our interests to have a healthy English economy, but for reasons of sentiment—although many hon. Members will smirk when I say that. Many of my hon. Friends have experience of life and work in England and we agree that unemployment

means human misery. Our first concern must be with Scotland.
Appendix 20 of the Toothill Report of 1961 shows that since the beginning of the century unemployment in Scotland has been anything from one and a half times to twice the unemployment rate in the United Kingdom as a whole. I was appalled by the complacency of the Secretary of State for Scotland last night, when he seemed to suggest that an unemployment figure of 127,000 in Scotland was not too bad. He has been reminded often enough of his remark when in opposition to the then Secretary of State for Scotland, that if he were in office he would resign when unemployment in Scotland reached more than 100,000.
I remind the right hon. Gentleman that 127,762 people unemployed in Scotland represents 127,762 pieces of human misery, degradation and hopelessness. I agree entirely with what the hon. Member for Walton said about that. For the Secretary of State for Scotland to claim, as he did last night, that a reduction of a few thousand to a figure of 127,762 unemployed represented a success makes a mockery of the English language, of the right hon. Gentleman's Secretaryship, and of the system which sustains him in that office.
Unemployment, as the Toothill Report said in a blinding statement of the obvious, is usually related to the industrial structure. That is worth underlining. I restate what the centralisation report by the Scottish Council in 1969 said about the shakiness of Scotland's industrial structure. It said:
Thirty years ago, the great problem for Scotland was what to do to counter the head-long rush of industry to places like the Great Western Avenue in London, in order to retain and create more employment in Scotland. To a large extent we have succeeded in changing the environment so that production in Scotland has grown steadily. But now we are faced with a different situation, for which quite different solutions will have to be thought out and applied. The question now is how to stem the stampede of the decision-making centres of industry, of its heads of design and of finance to the south.
Sir Leon Bagrit, in his 1964 Reith Lecture, amplified that when he said:
it is morally wrong and socially absurd to condemn the North to an existence outside the main stream of industrial change and progress, permanently regarded as old and poleterian, while the South becomes new and middle-class.


Nothing has been done since Sir Leon said that, or since the Scottish Council report of 1969. It is because we do not have the centre of decision-making in Scotland that we suffer from such dreadful unemployment today.
We have to welcome the Chancellor's measures as far as they go, but they are only palliatives or, as my hon. Friend the Member for Aberdeenshire, East said, only cosmetics which are too little too late. They will do nothing to cure the problem of Scotland's economy, a problem which is structural in nature. I have one or two suggestions for the Secretary of State. The Scottish Development Agency should be given an annual budget of £300 million rather than £300 million over an indefinite period, as has been suggested. This sum should be free from the stranglehold of "Big Brother" in the shape of the National Enterprise Board.
There should be a mixed State-private industry venture capital fund—an offshoot of the Scottish Development Agency—which would invest risk capital in small businesses, in entrepreneurs who could create in Scotland the industries of the future controlled in, by, and for Scotland. These industries would provide long-term jobs for Scotland. The Scottish Development Agency should have offices in the major industrial centres of the world to attract industry to Scotland and also to act as a vehicle for the passing on of technological information to indigenous industries in Scotland.
The most important thing is that the Scottish Assembly must have total control over trade and industry in Scotland. There is no other way. Nothing less will enable us to begin dealing with the awful unemployment which the Union of Parliaments has bequeathed to us over many years. It is a physical, logical and economic impossibility for us in Scot-land to make a bigger mess of our economy than this place is already doing.

Mr. Alexander Fletcher: You wait.

Mr. Crawford: We could not do any worse and I think we could do better. I am sorry that the hon. Member for Edinburgh, North (Mr. Fletcher) does not have my faith in Scotland and the Scottish people. The Daily Mail points out today that the one thing which unites Tory and Labour Members in this House

—apart from the subject of salaries—is when an SNP Member is on his or her feet.
The Chancellor said that there was no scope for cutting down on unemployment because of inflation and balance of payments problems. Scotland has no balance of payments problems. We stand on the threshold of great potential. We need reflation, not just to deal with unemployment, but for social services.
My hon. Friend the Member for Aberdeenshire, East never tires of pointing out that out of the 121 worst areas of social deprivation in the United Kingdom there are 115 in the West of Scotland. Since the Chancellor has not even begun to reflate the Scottish economy, we shall be voting against the Government tonight. This will not be a vote for the Conservatives; it will be a vote against a London Government and a centralised system which sees the United Kingdom as a monolithic, unitary economic system.
The hon. Member for Walton said that the problem could be solved only centrally. We totally disagree with that. Tonight we shall be reflecting the wishes of the Scottish people as shown in recent regional elections and by a recent opinion poll, which showed that the Scottish National Party was the largest single party in Scotland. A self-governing Scotland would never tolerate an unemployment level of 127,000.

6.21 p.m.

Mr. Nicholas Ridley: The speech of the hon. Member for Perth and East Perthshire (Mr. Crawford) had the defect of all the speeches I have heard so far from the Government side in this debate. There has been in them a concentration upon the evils which beset our industrial society in terms of unemployment, but very little time has been spent upon the causes or the cures. Whatever may be the rights and wrongs of separate, devolved government or integration with England, it is incumbent upon the hon. Member for Perth and East Perthshire to say what he would do with his devolved government which would be likely to cure unemployment in Scotland.
Up to the last three or four years, the right level of unemployment, the maximum consistent with no overheating, was obtained by proper budgetary policies,


by avoiding surpluses or deficits of any great scale, and hitherto the economy responded fairly well. But recently we have faced a new phenomenon—that although we have an enormous deficit, we are getting much higher levels of unemployment than we should have expected to see with such a deficit.
The decline in our industrial sector is very rapid and it is accelerating. Unless it is arrested and turned round, we shall have enormously severe problems of industrial unemployment, whatever the level of demand we dare to go for. Simply to go on pumping money that we have not got into industry will not meet the scale of the problem facing us, because we face some sort of industrial collapse. We must look more carefully at the causes and cures of our problems.
There are two lessons to be learned from that shabby day yesterday when the Government came clean on Chrysler. It cannot be right, as hon. Members on both sides have said, to make an agreement whereby our scarce resources for industrial investment can find their way by transfer payments straight through to Detroit shareholders. The Government were hijacked by Mr. Riccardo. They got him in the "Spaghetti House", but Mr. Riccardo managed to get away with more than others who try to do that in real life.
The Government have been taken for a ride with British taxpayers' money. It is a scandalous waste of money. The Chancellor of the Duchy of Lancaster is alleged to have been the architect of this crazy scheme. We hear of dissension in the Government and rows in the Cabinet, but the right hon. Gentleman should be called to account for his part in this. There is a maxim: "Give me a fulcrum and I can shift the world"; give me a Lever and I can fix anything.
The right hon. Gentleman can make a bargain of this sort because he seems to the outside public to carry the confidence of the City, the confidence of industry and the confidence of the Tories. He is allowed to get away with murder on those flimsy and mistaken grounds. If anything should come out of the Chrysler affair, it is that "Mr. Fix-It—I-can-get-on-with-the-City" is exposed by the denunciation of the lousy deal that the Government have done.
The second point is that unless one has the cars, one can never export them nor save imports, and the Chancellor of the Exchequer confirmed this today. He said he did not want to put import controls on cars because we had not got the cars with which to replace imports or to export—supposing we could find the markets—and he went through lists of waiting periods. There are no spares for British Rail engines and wagons, and the truth is that we are not producing the goods. We are not producing motor cars, engineering equipment, coal, or steel, on anything like the scale that would enable us to deal with our economic problems. One has to put the two things together: we are not producing; we are failing to provide the jobs as a result, and our industrial sector is declining. What is the cause of this?
The hon. Member for Liverpool, Walton (Mr. Heffer) made one of his best speeches he always does best when he is overflowing with emotion. He seemed to assume that it must be capitalism that was the cause of all the problems, but the evidence is the other way. The evidence is that we have ever greater degrees of Socialist Governments—and I include in that the last Conservative Government. They have tightened the controls and tightened the screws on business, tightened taxation and have made it their business to discourage and put off those who would invest and man-age industry to the point where industrial investors and managers are reaching something like despair.
I do not believe that the solution to these problems lies along the lines which the present Government have staked out—the social contract. long since for-gotten, and an element of worker participation. I do not believe that any Labour Member in his heart of hearts believes that passing a law which puts a certain number of workers on the board, or improving communication within industry or enabling workers to influence decisions, will arrest the decline in British industry.
Nor do I think that the activities of the Secretary of State for Employment have been anything but counter-produtive. His unfair dismissals legislation, his closed shop legislation, his projected dock labour Bill, can only make restrictive practices more hallowed and more


hardened. They are all counter-productive because we face the great dilemma that if we are to have an industrial sector which is to be competitive and stand on its own in world markets, exporting because it is producing a lot, cheaply and well, we must have less over-manning, fewer restrictive practices, more productivity and more labour mobility.
All these things are at the very heart of the success of our competitors When we read that our motor car production is only half what it should be, we should conclude that we must do something to encourage it. But the dilemma is that we have this high rate of unemployment, and if we were to succeed in tackling overmanning and restrictive practices and the rest, we should undoubtedly increase unemployment further.
Speeches like those of the hon. Member for Walton and the hon. Member for Perth and East Perthshire make unemployment seem to be the greatest peril that we face. They harden in men's minds the need for restrictive devices and practices to prolong employment, but it is employment which is worthless. It is the pressure for import controls and for bogus job creation where the job is not really lasting which encourages the attitude that people can look to palliatives and expedients rather than face reality in the industrial situation.
The Government could have given a lead. They could have at least condemned restrictive practices and over-manning. They could have advised people that it was not in their long-term interests to cling to jobs that were no longer necessary. Instead, they have hallowed these bad ideas—and the Secretary of State for Employment is very guilty of that—by trying to stratify the employment structure and prevent industrial change. The right hon. Gentleman's short-term compassion has led him into a position of long-term oppression which is going to do great harm.
The Chancellor of the Exchequer could have said "I have listened to the people who have tried to invest in British industry and to manage it at all levels". It is easy enough to find out what they are saying, to find out why industry is declining. They are saying "We are knocked for six by endless tax changes, endless regulations and changes in those regulations; we have to employ more and more

people to deal with taxation, the Sex Discrimination Act, the Equal Pay Act, the Community Relations Act, training regulations, redundancy regulations, and so on." In other words, they are having to deal with all the nonsense of Socialism. They say "We cannot find time to man-age the business by the time we have coped with all these things."
All this is at the heart of the decline of British industry. In the final analysis, it comes down to people. The difficulty about a Labour Government is that in their thinking they divide the supply of a product from its construction. They are inclined to say that they can bash the dairy farmer as hard as they like, but that there must be more milk because it is valuable to health and children's teeth. Then, of course, they get into trouble because unless one sees about supply, demand cannot be met.
When one comes to consider the reasons for the decline of British industry, one realises that it is because those who are expected to take the risks, who are expected to make the investments, who are expected to manage in difficult circum-stances, who are expected to exploit extremely expensive capital equipment, have been told that they are not welcome in our society and are not to be encouraged. They are the people who are now packing their bags to go overseas. They cannot make money here, and they want to make money and do not just want a salary. We have penal rates of taxa-tion—the capital transfer tax, the wealth tax, and the whole kitchen sink of taxa-tion—all thrown at these people by the Labour Party. No wonder we do not get the investment we need and higher industrial production. Instead, we get decline.
It is ever-greater degrees of Socialism which are destroying British industry. It is not a failure of capitalism, but a failure of Socialism's frowsty 19th century theories about how one can make productions without bothering to motivate people. The question of whether Scotland would be better off separated or integrated is futile.
The question that the hon. Member for Perth and East Perthshire should be answering is how he would generate wealth in Scotland. But he has never answered it. All he utters is the parrot cry that Scotland is a nation. That is


no answer to Scotland's problems. He has a duty to tell us what he would do. Investment in industry is declining because every policy pursued by the Government is counter-productive to the aims they are trying to achieve.

6.37 p.m.

Mr. George Rodgers: Some 24,000 men in the North-West of England have been completely unemployed for more than a year. That figure represents 20 per cent. of the total number of long-term unemployment in the country. To those who are prepared and prefer to work, unemployment is frightening and demoralising. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) knows that. He has experienced it.
I was a schoolboy in the 1930s in a family of six children. My father was a joiner in the building industry. I can remember him on a bicycle chasing a lorryload of timber and desperately hoping that he would catch it and that there might be a job at the end of the journey. That is the sort of indignity to which ordinary decent people were ex-posed. I can still taste the flavour of it, and I shall never forgive it or forget the people that were exposed to it.
I therefore welcome the measures, in-adequate as they are, that the Government have announced, such as the plan to stock steel and to restrict certain imports. They warrant some appreciation. I think that it is perhaps too little and a little late, but the package demonstrates that the Government are prepared to recognise that they could be wrong. They are prepared to alter course if the evidence justifies it.
People quote Aneurin Bevan these days although they paid very little attention to his guidance when he was alive, but he said once that to impose import restrictions would be to put a wall around chaos. That remark is worth examining. Perhaps it is necessary at times to build a wall to remedy the chaos.
I hope that when the Government press ahead with import restrictions, which I favour in the immediate situation, they will take great care that manufacturers do not abuse the situation by taking ad-vantage of a soft home market, and that they will put alongside the restrictions

penalties and measures to protect the public. We should congratulate those hon. Members who have fought the long and grinding battle to establish a system of import controls. All we have done to date is force the door open. The crusade is by no means finished.
I think that most hon. Members look forward to the day when we can abandon all defence spending. I concede that there are differences of opinion about the climate and the conditions that will be necessary for that highly desirable end, but it seems that we are moving towards genuine defence expenditure cuts. I honestly believe that there is room for savings in that area of expenditure. How-ever, it would be unforgivable if we stumbled forwards without adequate preparation. The substantial workforce in the defence industry is entitled to be in-formed and consulted. A planned programme should take place so that people now employed in a rather ludicrous occupation can be guaranteed full and gainful alternative employment—[Interruption.] I shall give way if the hon. Member for Plymouth, Sutton (Mr. Clark) wishes to intervene.

Mr. Alan Clark: As I have been challenged by the hon. Gentleman, I am most grateful to him for allowing me the opportunity to intervene. Does he agree that the defence industry plays a vital part in Britain's security and that in the present international climate it is one of the very few industries in which a growth element is discernible?

Mr. Rodgers: There might well be a growth element, but that is not necessarily an encouraging situation. It seems that some people are prepared to continue to take account of defence expenditure by other countries until the whole of the nation's income is absorbed by defence spending. I reject that philosophy.
In my constituency there is a substantial RAF complex and many of my constituents work for the British Aircraft Corporation. Others of my constituents work at Gloucester on guided weapons. I see no reason for any loss of employment or loss of income among those people if their employment is switched from defence to alternative employment. There need be no loss if there is advanced planning and a conversion programme.
It is apparent that wherever possible we should encourage the production of commodities that are socially valuable to our society. There should be no lack of finance and no lack of employment merely because it is decided that less money should be spent on weapons of destruction and that more money should be spent on more useful purposes. We should be able to research the market so that the products that are produced are the pro-ducts that are in demand.
I am sure that the people now employed in the defence industry would prefer to be employed in a more useful occupation. Given the choice of queuing up for unemployment pay or producing weapons of war, I accept that the people employed in the defence industry would prefer to produce weapons of war. In this context I suggest that to use the phrase "weapons of defence" is to employ a euphemism. To say that we cannot ease individual Members' consciences or the economic crisis by risking the well-being of the workers employed in the defence industry is to offer a bogus option. None the less, a carpenter, given hammer, nails and other necessary tools and planned opportunities, can make either a coffin or a table, with little trouble in the change. I suggest that that applies to most of those who are employed in the defence industry. They are mostly highly skilled people who would provide a heartening influx of ability into useful production.
There are tremendous possibilities following the diversification of military spending. For example, short-take-off-and-landing passenger and freight aircraft have not been utilised or given an application in the civilian market. The adaptation of gas turbine engines for use in ships is a process already under way in Japan. That is a country that spends less than 1 per cent. of its gross national product on defence. I could give a long list of examples, but I shall not linger on the one topic. There is a substantial list of projects that could be undertaken if the work force and the expenditure that is now devoted to the armaments industry were made available for civilian production.

Mr. Nicholas Winterton: Does the hon. Gentleman consider that the Harrier and the maritime Harrier project are useful to this country? Does

he consider that those projects have a useful export potential? Would he sup-port the sale of Harrier aircraft to China if the Chinese Government wished to purchase them?

Mr. Rodgers: The hon. Gentleman misinterprets my purpose. I do not say that there should be a sudden switch from spending on weapons of war. I am saying that we should recognise the situation in advance and that we should not cut back on defence spending without making provision for alternative useful employment.
In common with most of my hon. Friends, I have great respect and affection for the Ministers who serve the Department of Employment, but it seems that they are largely engaged on meeting day-to-day crises. God knows that there are sufficient to keep them fully occupied. I have mentioned the immediate issue of import control and of defence spending, but I conclude my remarks by referring to the necessity for a long-term strategy. I speak of the employment and economic situation generally.
It is generally agreed that much of our economic misery arises because there has been an insufficient level of investment in industry. Various explanations are offered. Some of us believe that the lack of investment has arisen because the Government have not harnessed and directed investment. Others believe that the rewards are scanty for those who invest privately. It has always seemed strange, if investment is the key to our future prosperity, that we should leave the matter in the hands of managers of investment funds, whose only motive seems to be a quick return on whatever form of investment is being handled. If war is too important to be left to the generals, I suggest that our future prosperity is too important to be left to investment fund managers. It is a curious system and I should prefer some national control over investment.
We all recognise the desperate need for intelligent investment in industry. We can argue afterwards about the distribution of the wealth that is created. I have firm opinions on that score. All too frequently we go wrong in assuming that a greater investment in industry will lead to a greater amount of employment in manufacturing industry. I believe that


the reverse is true. The greater the investment in industry, the smaller will be the ultimate labour force. All the evidence demonstrates that that is so. Between 1964 and 1973 our gross national product rose by 27 per cent., but the labour force reduced by 5·5 per cent. There have been remarkable examples of movement away from labour dependency. The gas, electricity and water industries increased output over the same period by over 57 per cent. with a labour force reduced by over 16 per cent. In the same period the output achieved by the engineering industry increased by 46 per cent. whilst employment in that sector fell by 13·2 per cent.
The coal, petroleum and chemical industries recorded a massive increase in output over the same nine years of 71·5 per cent. whilst their labour forces were reduced by 8·5 per cent. The textile industry achieved an increased output of 30 per cent. and there was a 29 per cent. reduction of the work force. The list is endless. The fact is that all industries are moving continually towards capital-intensive structures. The pace will continue to accelerate. It may be that the long-awaited upturn in the economy will brieflly absorb a greater number of workers, but it will be a passing phase and will not disturb the inevitable end.
We should welcome this development. Indeed, I would press for a higher level of investment. It is on the wealth that is generated by industry that all else depends. I think that most of us recognise that the old concept of full employment is now obsolete. We should plan to meet changed conditions. We should examine the options that are now becoming available.
I have never believed that work in itself is virtuous. In fact, it is often downright drudgery. A surprising number of people in possession of great private wealth neither toil nor spin, nor do they seem unduly depressed or embarrassed by their idleness. What is bitterly resented by ordinary working people is the stigma, the indignity and the poverty that is usually associated with enforced unemployment.
We should look at the new situations that are developing from a new angle. We should talk of a shorter working day and

a shorter working life, of a sabbatical year for working people and of wider opportunities for education and travel. We should plan now to accommodate more people in the public services—in public transport, the hospital services and the social services. This is where there is still a labour end of the market, which is important.
If we move forward to this situation and recognise the change of relationship between labour and capital, it must be turned to our advantage. Unless we are prepared to re-examine the position, there will be chaos and misery. It is not generally recognised that by the year 1985 there will be nearly 2 million more people between the ages of 16 and 65. If we think that we shall be able to accommodate them in industry, we are misleading ourselves.
I have long believed that capital is the servant of labour rather than labour being the servant of capital. If we have the will, we can build on this situation and create a better tomorrow. I hope very much that my collagues in the Department are working on this situation and creating this foundation.

Several hon. Members: rose—

Mr. Speaker: As I said yesterday, I have no power to control the length of speeches. But I hope that from now on hon. Members will try to make their remarks in about 10 minutes.

6.52 p.m.

Mr. Alan Clark: There has been ample evidence in this debate that economics is still not an exact science. In their discussion of the relationship between unemployment and inflation, some hon. Members have said that unemployment is the result of inflation, others have said—possibly, in some measure, this applies to the Chancellor of the Exchequer—that unemployment is the cure for inflation, and others have said that unemployment is the cause of inflation.
I believe profoundly that unemployment is highly inflationary. It must be inflationary to pay people for doing nothing. The money that is used to pay them must be drawn from taxation and that taxation is itself drawn from the remaining and contracting prosperous sector of the economy.
But if there is one factor more inflationary than paying people for doing nothing it is paying people for making products for which there is no demand, because they are being paid for utilising their skills and labour to consume resources and materials which often are purchased with foreign exchange and taken out of the general level of productivity, after which it is found that there is no demand for the goods that they produce.
It seems to me that this is the interesting and ominous new element which has entered the present phase of Government behaviour—it hardly merits the description "policy". They have found themselves arriving precipitately in the consumer end of the economy. They are now dabbling in that sector of industry, where they are at the mercy of individual demand. They are at the mercy of those many millions of particles in the overall element of consumer demand which finally coalesce and form the basis on which a product is either received or rejected.
The trail of events that led from the Government's first intrusion on the balance of the motor cycle industry, through British Leyland, and now to the enormity and idiocy of their intervention in the Chrysler situation, is all too easy to discern.
The very excuse that the Government use and that many of their supporters flaunt to justify going into the Lobby to support a proposal that they know in their hearts to be unsound is that it is saving jobs. I suggest that that is a travesty of the word "saving". Although they may briefly, in some instances—for those who will not progressively be made redundant—be buying time, they cannot be said to be saving jobs in the sense that job security is understood in the Civil Service, for example. The job-saving argument is not a valid one unless it is allied to some kind of strategic thinking affecting the whole economy, and there is no sign of that.
This is the strange paradox about the Government's current behaviour. It is neither capitalist—for the element of basic prudence and husbandry are absent; by capitalist standards, the Government are indulging in criminal overtrading—nor is it Socialist, because there are not

even the most elementary safeguards or back-up planning discernible in any of their current decisions.
The first consideration that we would expect the Government to make, if they were planning as responsible Socialists, would be to take care of the balance of payments. Yesterday, I asked the Secretary of State for Industry about one element of this after his statement about Chrysler. He did not deny the figures that I quoted to him, which showed that the overall result of the provisions that he had made for Chrysler, in terms of the balance of payments, would be equivalent to buying dollars at the rate of 1·30 to the pound, which cannot conceivably be thought prudent or anything but, in the very shortest term, disastrous. The only answer that the right hon. Gentleman could make was some rather muddled generality that there might be some balance of payments saving by the negative fact that if Chrysler cars went on being turned out they would fill a gap which might otherwise be filled by foreign cars. The claim that the whole gap left by Chrysler cars would be filled by foreign cars is palpably false. I may touch on the fact that the right hon. Gentleman is doing great harm to British Leyland, because presumably some proportion would be filled by British Leyland, Fords, or other cars produced in this country.
I take this argument one stage further, because the Government's thinking and calculations on the balance of payments side of this operation are so faulty that they should be expounded at slightly greater length. I speak of the Government's "calculations", but I have no reason to believe that there have been any calculations, because there is no evidence that the Government have devoted any thinking to this aspect of the problem in their panic rush to—as they say—save jobs.
If, on the credit side in the Chrysler operation, we put the Iranian order, which is the only firm order contracted for, we may generously allow a nominal figure of £100 million. If we add to that, putatively, some export order representing one-third of the value of the Iranian order, it represents another £33 million. Again, giving the Government the benefit of the doubt, if we allow for


one-third of the gap which would have been left were Chrysler cars to cease being produced, on the 1974 figure, of 270,000 cars, it represents putative sales of 90,000. At an average profit level of £200 per car, wholesale, we get another figure of £10 million. Therefore, on the most generous assessment, there is a net saving of £143 million on foreign currency, for which the taxpayer is being asked to put up £162 million. In fact, the taxpayer is buying dollars—the universal medium of foreign exchange at present—at a rate of slightly less than £1 for one dollar.
However, the situation is even worse than that. On top of that there is a debit column, which includes, first, the cost of the Simca kits which we are told are being made in Paris and imported for assembly at Ryton.
Secondly, the debit column includes the various remittances, over which no control has been postulated, to the parent company in America. I think we can safely assume that there will not be a nil level of remittance. Therefore, whatever it is must go into the debit column.
Thirdly, there is the element of profit washing which has been established as a practice by this company. The right hon. Member for Lanark (Mrs. Hart) drew attention to that matter last night, and it was highlighted in the shop stewards' committee's report. I believe that is a flagrant, though circumnavigational, breach of British exchange controls.
If we add those three debit elements to the figures that I hope I have already demonstrated to the satisfaction of the House, we get an exchange rate of less than £1 for one dollar on the original quotation. Therefore, on this operation alone there is a clear net deficit on foreign exchange account.
That is just one element of the negligent planning—indeed, total absence of planning—that the Government seem to be applying to their curious profligate and ill-considered intervention in the consumer end of the industry. Any capitalist who conducted his affairs in that manner would find his bankers withdrawing their support overnight.
It is not Socialism, either. It is easy to formulate a Socialist solution to the problems of the motor industry. Many

hon. Gentlemen know that it carries certain concomitants—control over imports and suppression of individual choice—because people must be forced to buy the products that we are making, or we must make it impossible for them to buy anything else. That is the current practice used in Iron Curtain countries for solving these problems.
This solution is neither capitalist nor Socialist; it is simply the solution put forward by some crazy, profligate spendthrift who tries to buy off trouble from whatever quarter without any thought for the future.
I do not think that there is any hon. Member who, in his heart, does not realise that all this money—all the money that is going to British Leyland, all the money that has already gone to Norton Villiers Triumph, and all the money that is being sploshed into the consumer industry—will go down the plug and that in four or five years, or possibly only three years, the situation in both the industry and the country will be immeasurably worse.
Only yesterday I received a delegation from the Plymouth branches of ASLEF and the AUEW concerning the threatened railway cuts. I had to explain that one of this country's essential services may be curtailed for lack of funds at the same time as enormous amounts of public money were being channelled into ill-conceived commercial participation in the production of consumer goods.
The word "monetarism" has acquired a pejorative identity. I suspect that many hon. Members who scorn its doctrines have not inquired too closely into its meaning. The principle argument against monetarism has never been that it was dishonest, that it was based on false premises, or that it was inappropriate to our economic circumstances. It has always been—I recall this was the argument two years ago—that it would create 1 million unemployed. We were told "Watch out. You will have 1 million unemployed." But, under the existing amalgam of cowardice and expedience, we have 1¼ million unemployed. By some accounts, we may have I¾ million unemployed.
This policy will double or even treble danger. It is highly inflationary and totally divisive. All hon. Members know from experience with constituents, the level of personal privation and indignity


that it causes. It is also, without any attempt to cure our fundamental ailments, an ominous indicator to our vulnerability to foreign competitors who are now beginning to emerge from their problems, having had the courage to tackle them with measures from which this Government still shrink.
Unemployment in this country has arisen not from the ruthless application of monetarist policies, or even from the doctrinaire tenets of Socialism; it has arisen from the fatal combination of incompetence and electoral expediency—a clumsy mixture of outdated Keynesian dogma and fiscal panic, of which the Chrysler incident is the latest but, regrettably, not the last, example.

Mr. Speaker: That speech lasted 15 minutes.

7.7 p.m.

Mrs. Renée Short: This debate is a sad coda to the debate yesterday on the Chrysler situation. I share the views which have been expressed from both sides of the House on the disappointment and concern that is felt about the package deal which has been presented and its effect on many parts of the country.
Yesterday the Secretary of State for Industry said that unemployment would fall most heavily in the Midlands. My constituency is in an area where unemployment has risen considerably in the last year or so. Fortunately, we have more diversification than Linwood. Wolverhampton was an important railway town at one time. It is not any more. We have the derelict railway workshops as a perpetual reminder of former days of the glory of the railways. Railway workers in my constituency are concerned about the rumours of cuts in the railway system, to which the hon. Member for Plymouth, Sutton (Mr. Clark) referred: they will create even greater unemployment in Wolverhampton. However, for the time being we are more concerned with the effect of the Chrysler situation.
In Wolverhampton, 6½ per cent. of the adult working population are unemployed, but I am concerned about the effect of unemployment on young people. In my area there are 744 young people unemployed, almost 500 of whom left school last Easter and in the summer and

have not yet had jobs. Only 127 young people—mostly girls, because there are very few jobs available for boys; most jobs are for girls in unskilled factory work—have had any advantage from the employment premium, which, I understand, is to be ended in February. I should like to know what is to happen to the young people's employment premium. It is a matter of great concern in Wolverhampton, because almost 500 youngsters have had no work for nine months.
The jobs being provided for these 127 young people are eating into the jobs which should be available for the school leavers next Easter. Within six months we shall be having the summer school leavers again. There is a cycle of unemployment and lack of activity among young people and it is a matter of very great concern. They are imbibing unsatisfactory habits. They are not getting the opportunity to work, but they want to be independent, have a job and earn money.
I raised the question of Norton Villiers Triumph factory in my constituency with my right hon. Friend the Secretary of State for Industry and, quite unjustifiably, got a very dusty answer yesterday. He chided me for not being here for the debate on the Summer Adjournment on 7th August when an hon. Member opposite initiated a debate on the motor cycle industry. But I could not possibly have been here; 1 was in Mexico at the time. I hope my right hon. Friend will not chide me like that again.
We are prepared to pay out enormous sums of money to prop up a lame American multinational duck which is producing cars that nobody wants to buy. We are encouraging it in that. The motor industry is contracting all over the world because of various influences affecting cars, not least the scarcity and cost of oil. The NVT motor cycle and industrial engine factory in Wolverhampton has been unoccupied since July. That is a long time for the workers to maintain their resolve that they want to take over the factory and produce their new engine, the Wolf, which is to be a competitor to Japanese machines. They are confident they can export it; they have agents here and abroad willing and anxious to handle it. The workers also want to continue with their industrial engine which could


bring great benefits to developing and agricultural nations.
They have asked for only £7 million and 1,600 jobs are involved. The Government will not give that small amount, yet they will provide large sums to buy time for Chrysler. The shop stewards and the action committee from NVT have been anxious to meet the Secretary of State for Industry to demonstrate how unemployment in Wolverhampton could be reduced for this small amount of money, but they have been unsuccessful. There was a meeting with the Under-Secretary on 3rd December when they presented their audited, costed, cast-iron scheme. The very next day my hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards) received a letter—before those proposals could possibly have been considered by anybody in the Department—saying that the Government were not prepared to put £7 million into this factory.
There have been all sorts of curious rumours in the Press this week that money was to be found by the Government and Barclays Bank to support the NVT factory at Small Heath, but it was the management of this factory which caused all NVT's problems in the first instance. I wish I could persuade my right hon. Friend who is to reply to this debate that there will be some help for Wolverhampton with this small outlay.
There has also been disturbing news that American multinational companies are to reduce their investment in Europe as a whole. This could mean further increases in unemployment and further contractions in employment in Britain and the rest of the Common Market countries. Mr. Thompson, the President of the Goodyear Tyre and Rubber Company, who used to be managing director of the Goodyear factory which employs nearly 3,000 people in my constituency, said recently that the company's foreign income had dropped 29 per cent. in the first six months of this year. He said that among the main causes were strikes in Great Britain, the main base of the European operations of the company at present. He also said there were many labour troubles in other parts of Europe and that a good deal of Goodyear's capacity was lying idle in Europe because of the European oil shortage and currency

changes which had increased the cost of making tyres. The company is to concentrate its investment in Asia, Africa and Latin America. This is a disturbing warning to us and a worrying indication for Europe as a whole. We may face very considerable difficulties if Goodyear, which is the largest employer in my constituency, contracts its activities in Europe any further.

Mr. Frank Tomney: This is a good Right-wing speech.

Mrs. Short: Perhaps my hon. Friend will indicate how it is a Right-wing speech. I am quoting details of a firm with many factories in Europe. If it does as it is suggesting, we shall be in difficulties.
Are the Government going to do anything to plan employment in this country on a long-term basis? What help are we to get out of this disastrous situation? Are we to sit back and wait for more foreign companies to come with their begging bowls threatening to withdraw unless we give them money? These problems which overshadow the whole country are matters of the most serious concern.

7.18 p.m.

Mr. A. G. F. Hall-Davis: I hope the hon. Member for Wolverhampton, North-East (Mrs. Short) will forgive me if I do not follow her on some of the points of local application to her constituency, though I hope that what I have to say will have a bearing on the problem of school leavers to which she referred and that if she agrees with me she will give me her support.
With unemployment at present levels the situation cries out for bold action, though it must be well judged. Without bold action we shall see 1¼ million unemployed early next year, and the figure will probably reach 1½ million in the course of the year. Surely hon. Members of the Labour Party find these figures and this prospect intolerable and totally unacceptable? I think the Secretary of State for Employment indicated as much in the course of an earlier speech.
I shall try to be constructive and brief. The measures announced today will


achieve no substantial reduction in unemployment. There is only one step which the Government are in a position to take and which could make a real impact on unemployment. There has been no mention of it so far in the debate and surprisingly little discussion about it inside or outside the House. We could, at little cost to the Exchequer and with no damage to the country's economic position, reduce by several hundred thousand the number who would otherwise be unemployed. The way to do it is to lower, temporarily, the qualifying age for national insurance retirement pensions for men. I recognise that temporary reduction in the qualifying age would not produce more jobs, but it would substitute voluntary retirement for involuntary, deeply-resented unemployment. It would be achieved by the voluntary withdrawal from employment of those who had already largely prepared themselves mentally, domestically and financially for retirement. It would create job vacancies for the younger men who are anxious to find work.
According to the Department of Health and Social Security at present four out of five men claim retirement pension within a year of reaching their sixty-fifth birthday. This indicates a substantial wish to retire at the first opportunity. My industrial experience, which has included matters of human relationships and personal preference, leads me to believe that it is not generally realised for how many people retirement is an eagerly awaited release from a work routine and daily timetable that is becoming increasingly burdensome to them. That is not the case with everyone, but it applies to a substantial number.
There are about 270,000 employed insured men aged 64 and well over 500,000 aged 63 and 64. I suggest that about a half of them might take immediate advantage of the temporary reduction in the qualifying age. For some there would be the problem that their occupational pension would not be payable until 65, and that would be a deterrent to retirement. I believe from a close association with a major occupational pension fund that many employers, although not all, particularly the larger ones, would be prepared to make temporary arrangements to pay the full pension one or two years

earlier if the Government gave them a lead and if adjustments were made to the Inland Revenue code covering occupational pension schemes.
I recognise that all vacancies created might not be immediately filled, and to that extent the cost to the National Insurance Fund of the additional retirement pensions would not be balanced by a reduction in the payment of unemployment benefits. However, after the period of rundown in the economy, the delay before vacancies would be filled might be shorter than would at first be supposed. Answers to Questions I have put to the Secretary of State for Social Services suggest that the cost of unemployment benefit, when earnings-related benefit and supplementary allowances are taken into account, exceeds the cost of the retirement pension—probably substantially. My point is that, of male pensioners aged between 65 and 69—the nearest one can get to the 63 to 64 age group—only one in six receives supplementary pension, whereas of the unemployed men receiving benefit—there are 900,000 such people—two out of three receive supplementary allowance.
To contain unemployment in this way would involve no risk to the economy, no switching of resources into candy floss activities, and no undermining of the ability to take full advantage of export opportunities. There would be no sudden sucking in of imports, no added burden on the trade balance, such as would follow the stimulation of home demand on the scale needed to bring about a comparable rapid creation of additional jobs. What worries me is that if the Government do not act in the way I have suggested, a method which will do no damage, they will be panicked by the figures next year into taking action that will be damaging to the economy and will cause distortion.

The Secretary of State for Employment (Mr. Michael Foot): We have considered variations of this proposal most seriously, but our estimates of the cost are very different from the estimates produced by the hon. Member, and that is for a variety of reasons. I can promise him a full reply to the suggestions he is making and an explanation of the consideration we have given to the matter.

Mr. Hall-Davis: I thank the Secretary of State. What he has said amounts to an invitation to curtail what was already intended to be a brief speech.
I have, however, further comment to make along the lines of the speech by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). I believe that action on the lines I have suggested would ease progress towards an early and vigorous start on tackling overmanning in both the private and public sectors. The Prime Minister keeps repeating that this is not the time to tackle overmanning, yet if we postpone action we are cutting down the survival prospects of many firms and delaying further the return to national prosperity.
Perhaps at the back of the Secretary of State's mind is the thought that if the qualifying age were reduced it might be difficult to revert to a retirement age of 65. We certainly could not, with our economic prospects, afford a permanent reduction. However, I believe that we live in an intelligent democracy. I am sure the Secretary of State agrees with me. We probably both despair of that fact at times. Usually when he thinks democracy is being most wise I think it is being most prudish, and vice versa. I believe that people appreciate that in our critical situation exceptional measures are needed. This is all a question of presentation. It would be possible to return to a retirement age of 65 provided all uncertainty about that were eliminated from the start. That could be done by announcing, for example, that men born, say, in 1912 could retire at the age of 64, and those born in 1913 at the age of 63. That would avoid any reference to a lowering of the qualifying age. By how much the pensionable age should be lowered and for what age groups could be determined in the light of the Treasury's assessment of the timing and place of the hoped for upturn in the economy.
Today the Chancellor of the Exchequer used a sentence that actually described what I have been proposing. He said of another measure, which, I believe, will be far less effective than what I am suggesting, that it would be no substitute for economic recovery but that it was designed to blunt the effect of the recession. I am not suggesting that what I am proposing would have anything

more than a marginal effect on the economic strength of the country, but it would softten the impact of the recession, and it might save the Government from taking some very harmful steps under pressure of public opinion in the next 12 months.

7.29 p.m.

Mr. Ben Ford: The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) delivered his speech in his usual constructive manner, but I wish to refer to the speech by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who put the country in his debt for reminding us that the shadow of Selsdon Man still looms large on the Conservative Benches.
I give a qualified welcome to the announcement by the Chancellor today of measures seeking to provide some degree of control over imports of textiles, particularly made-up woollen goods coming into this country from State-trading nations. My hon. Friends and I with wool textile interests have been lobbying on this point for a long time, and I am glad that at last the Government seem to have taken some notice of our representations.
The measures appear at first sight to be less radical than we or the industry desired. However, we shall study them carefully and do our best to estimate their probable effect on the industry. I wish to emphasise that the figures used to calculate quotas should not be based on imports in recent years because in the past two or three years imports have increased steeply. I suggest that the calculation should be made over a considerable period, probably up to 10 years.
The Government have indicated that they do not regard some industries as expendable. We were beginning to wonder. If industries are regarded as expendable—if we say that textiles and footwear must go to the developing countries and that Hong Kong, Taiwan, and Korea should be allowed to manufacture electronics—where does the process stop? No industry is expendable, particularly the wool textile industry—a constituency interest that I am proud and glad to represent.
Although we are discussing unemploy-ment, the debate is wide ranging. Some of my remarks will be more applicable


to the Department of Trade, and I hope that my right hon. Friend will convey those remarks to that quarter.
Since 1968 the number of production personnel in the wool textile industry has declined by almost 50 per cent. On 31st December 1968, there were 109,433 production workers employed in the industry. By 31st October 1975 there were only 58,365 workers. The industry is slowly bleeding to death. Even between September and October this year there was a further decrease of 2,228 productive workers, and mills are closing almost every week.
The wool textile industry is constituted in small units which have been ineligible for many Government aids, including the Temporary Employment Subsidy Scheme, which had a lower limit of 50 workers. I am glad that the Chancellor of the Exchequer has suggested the lower figure of 25 for the job creation scheme. I admit that some money has been made available to the industry through the Wool Realisation Scheme and the Industry Act, but it has been insufficient to carry out the major re-equipment that is required and to protect workers against redundancy. I remind my right hon. Friend that 58,000 workers depend on the industry for their livelihood. I suggest that the Government should make more money available for modernisation, training and holding labour in the industry.
We need help in two directions. Young people are not coming into the industry, for obvious reasons, so new workers are not being trained to replace those who go out through natural wastage. We need some assistance with this. Secondly, when modernisation has taken place it has been accompanied by major acts of co-operation by the trade unions involved. Having agreed to modernisation and lower manning levels, the unions find that with present pay policies they do not derive, from increased productivity, the benefit of remuneration equivalent to the co operation that they have given.
I agree that during the current year no changes can be made, but I hope that my right hon. Friend will consider the representations that he will undoubtedly receive from the trade unions to recognise this difficulty and, subject to proper criteria, to agree in the next pay

phase to allow increases above the norm for increased productivity, particularly when Government money is involved. When Government money is involved in modernisation and increasing efficiency we must ensure that that investment is used as effectively as possible. An additional bonus would be that the workers would be further encouraged to co-operate in such schemes.
Another burden on the industry is the requirement to guard carding engines. That requirement tends to reduce rather than increase productivity, which is sometimes 20 per cent. lower. The larger firms are able to qualify for a grant of 20 per cent. towards the cost of guards, but in present trading conditions approximately 85 per cent. of firms have the greatest difficulty in finding the finance for this purpose. Each guard for a carding engine costs between £2,000 and £3,000. The total estimated cost to the industry is about £7 million. Further help in this direction would greatly assist the industry, especially small firms.
I draw attention to a further threat to employment in the Bradford area. I have evidence that the State-trading countries plan to dump electric motors in this country at less than production cost. I have detailed figures to demonstrate this, and a letter is being sent to the Tariff Section of the Department of Trade detailing the evidence and the figures. The State-trading countries have already taken about 30 per cent. of the EEC market in electric motors. Mr. Georges Chavanes, the Chairman of Leroy-Somer, the largest French motor producer, and also chairman of the rotating machines section of the French equivalent of the Electrical Manufacturers Association, states that
The situation has become intolerable. The small electric motor manufacturers have already in the past year reduced by 2,000 the number of jobs, 1,000 more will go soon. Half of the 20,000 employees in this sector are on part time.
This is directly attributable to unfair trading practices by the Eastern trading bloc.
An article in the Electrical Review of 27th June indicates that the German Democratic Republic is about to make a determined drive to secure a portion of the British electric motor market. Factory managers in the State-trading countries have informed representatives of the


British electric motor industry—not officially—that the sale price of their goods bears no relation to production costs and that pricing is a matter of Government policy. The production time for many of their goods is more than twice the production time in this country.
The Government must have regard to this threat to undermine our industry and our economy. I hope that they will take action before this situation arises. It is a question not of negotiation but of putting the bar up before more of my constituents become unemployed through unfair trading practices.
I wish to follow the remarks of my hon. Friend the Member for Chorley (Mr. Rodgers) in connection with defence. Many thousands of workers in the Bradford area and in West Yorkshire are employed in industries related to defence. I do not quarrel—nor, I suppose, do those workers—with the view that we should reduce defence expenditure to a level commensurate with our duty to NATO and the defence of the realm, but I emphasise what my hon. Friend the Member for Chorley said, namely, that any reduction in defence spending should be carefully planned so that it is not indiscriminate and does not aggravate an already difficult situation in my constituency and throughout the country.

7.41 p.m.

Mr. Dafydd Wigley: On 16th April, in the debate following the Budget, I was chided by the hon. Member for Swansea, East (Mr. Anderson) for "scaremongering" because I forecast that unemployment in Wales was likely to reach 80,000 or 100,000. It gives me no pleasure to see that the unemployment rate today is approaching 80,000. It is a source of great sadness to me. I fear that the steps taken today are too few and I suspect that some of them are too late and will be seen in Wales as only playing with the problem. It is not that we reject them—we welcome them as far as they go—but we need much more.
It is high time that we came to grips with unemployment. As a human right, every adult in these countries should have a job and it should be the responsibility of Government to organise the community so as to provide jobs. That is not impossible. It means planning and restructuring,

but we have a long way to go before we reach that objective.
Like the hon. Member for Liverpool, Walton (Mr. Heffer), I, too, even in my short lifetime, have seen marches by unemployed people—in the Caernarvon area in the 1950s—and it has left the same sort of mark on me. Before entering the House I was a councillor in Merthyr Tydfil. There was 55 per cent. unemployment in Merthyr before the war, and a village in the next ward, Dowlais, had 80 per cent. unemployment. Even with second-hand experience like that, one cannot help but be moved.
In Wales as a whole today there are staggering unemployment rates. In Bargoed, the rate is 11 per cent., in Blaenau Ffestiniog it is 14·3 per cent., in Caernarvon, it is 11·1 per cent., in Holyhead, it is 12·4 per cent. and in Tenby it is 15·6 per cent. In no fewer than 24 of the 44 exchange areas in Wales unemployment is over 7 per cent., and this cannot be suffered much longer.
Between 1925 and 1950, almost a million people left Wales—nearly 40 per cent. of our population. Hon. Members take us to task because we try to get more jobs for our areas, but we do so because we have suffered this history and do not want it again, because it is running our community down. If 40 per cent. of the population of these islands had emigrated all hon. Members would take the same attitude.

Mr. Heffer: The hon. Member is obviously getting back at what I said about nationalists. He should also understand that people are constantly leaving areas like Merseyside. Up to 40 per cent. might have left Merseyside over the last two or three decades. So this is not a problem only for Wales and Scotland. It is a problem for English areas as well—that is my point—and nationalism does not enter into the matter.

Mr. Wigley: For us nationalism does enter into the matter, to the extent that we need a system of government that will sort out our problems. No doubt the hon. Member will adhere to a system that he believes will sort out his problem. We see nationalism as the only way to sort out ours, because systems of government from this place by either party have failed abysmally over the years.
Of course we shall fight for factories in our constituencies and in Wales. I shall fight to get them to Wales rather than Liverpool and Scotland, and the hon. Gentleman will fight for his own people. It is hypocrisy to deny it. Otherwise, why would he now be looking for an import embargo and the stopping of capital movements to other countries?
We have seen failures by the public as well as the private sector in Wales. Nationalised boards are hell-bent on shutting steel works and freight depots, running down civil aviation, chopping railway lines and closing power stations. Irreparable damage will be done to the Welsh economy until, in a Welsh parliament, we can tackle our own problems for ourselves.
Wales has the highest unemployment rates for men and women, individually and collectively, of any country or region in Great Britain. More people are unemployed in the Pontypridd area than in the whole of New Zealand. Other small self-governing countries, like Norway and Sweden, Finland and Austria, have unemployment of only 1 per cent. or 2 per cent., compared with 7 per cent. for Wales. So this is not a world-wide phenomenon: we are getting the rough end of it.
The number employed has been falling over the last decade. More recently, it has been plummeting. In 1965, 1,028,000 people were at work in Wales. In 1975, there are just 954,000–74,000 fewer. If we include notified vacancies, we see that there are 87,000 fewer jobs in Wales today than a few years ago. The number of men in employment over the same period has fallen by 115,000.
The Government's answer to the long-term problem and the short-term crisis is the same regional policy that has failed before. The only glimmer of hope in the current package is the introduction of the Welsh Development Agency-30 years after it was first promised in a Labour Party election manifesto.
The most piecemeal policy that we have today is the advance factory programme. We hear about these factories as if they were manna from Westminster, yet those built in Wales since 1964 employ only 3,900 men and 2,200 women. We need 10 times as many if we are to absorb the currently unemployed.
The other policies in the package have also failed to get to the heart of the problem.

No Labour Government, and certainly no Conservative Government, can or will build a healthy economy in Wales. The Government have implicitly accepted this fact in the new job creation scheme. A total of £9 million will be spent to lure the 70,000-plus army of unemployed in Wales into more prosperious regions of England. This will affect the long-term future of my community. Industrial training places available in Wales have increased only from 1,884 to 3,102 between September 1973 and September 1975. That rise compares with an increase in unemployment over the same period of 42,000.
The contribution of the Government skillcentres is less than stunning—just an extra 139 places in two years. On 2nd December in a Written Answer to the right hon. Member for Anglesey (Mr. Hughes), we were told that the Training Services Agency had recently concluded a review of the training needs in my area of Gwynedd and rejected the establishment of a skillcentre there.
The employment picture for young people is particularly depressing. There are more than 5,000 unemployed school-leavers under 18 in Wales and only 896 vacancies at career offices. That means that five young people are chasing each job, yet in Great Britain as a whole the ratio is two and a half for every registered vacancy—[Interruption.] I should be grateful if the hon. Member for Walton would give me the same courtesy of silence as I gave him earlier in the debate.
Another step which is needed concerns the temporary employment subsidy, which should be extended to local authorities. Local authority redundancies of road workmen in my area have caused considerable suffering. In an area so dependent on local authority work this can be very significant. The level of the subsidy should also be brought up to the unemployment benefit level.
So a number of steps are necessary. One which should be considered as a matter of urgency is an examination of how the grant system has worked for the last 10 years. Of the 500 manufacturing establishments coming to Wales between 1966 and 1974. 75 have closed, and many people suspect that there are factories which come to Wales to get the cash and


leave soon afterwards. There are one or two examples of that that I could give to the appropriate Minister.
There is also the matter of an 11-point programme suggested by the Wales TUC at a meeting held 10 Downing Street on 10th October. Of that 11-point plan only one point, which has been touched on today—namely, that related to the textile, clothing and footwear industries—has so far been met. There are some good ideas contained in the programme and the Government would do well to examine them again.
In conclusion, I ask the Government not to do two things. First, they must not run down the railways, as has been threatened. I hope that at the conclusion of this debate the Minister will give a categoric assurance that there is a positive investment programme which will kill the rumours of closures that have been going around this palace in the past few years.
Secondly, the Government must not run down the steel industry. Only today I was contacted by someone from Wales who told me that 25 per cent. of the jobs in some steel works in Wales were currently in question and might well be abolished in the near future. I hope that the House will be given an assurance about that.
We put forward an 8-point programme. We want to see a capital investment programme for industrial infrastructure in Wales—this could be geared to the Welsh Development Agency—with more money being advanced, possibly from the £150 million currently allotted to £500 million. Secondly, we want an economic plan for Wales as a matter of urgency. Thirdly, we want the provision of a Welsh industrial investment fund which will attract money from bankers, institutional investors and so on, with the Government acting as guarantor and helping to lend that money to industry at low interest rates when new jobs are created.
Fourthly, we want an expansion of the community industry scheme and we urge that local authorities using this scheme should have the same 50 per cent. benefit from the EEC Social Fund as is available to the Government. That is only fair. Fifthly, we want a restructuring of the regional employment premium to a

stepped basis to give additional benefit for additional jobs—possibly some of this could be paid in advance.
Sixthly, we want the temporary employment subsidies increased to the level of unemployment benefit and made available for all redundancies in local government as well as in industry. Seventhly, we want more thought to be given to selective imports, especially goods such as electronics, refrigerators and Japanese cars. We must organise ourselves in advance to ensure that we have the capacity to meet any increased demand if outside products are prevented from entering this country. Finally, we need a boost in the training programme and a more intensive use of existing facilities.
That brings me back to where I started. Because the necessary steps have not been taken by either party, we need a system of government in Wales that can do the job. After all, that is the only responsible approach to the problem. If other people will not do the work for us, we have to do it ourselves.

Mr. Deputy Speaker (Sir Myer Galpern): Order. Mr. Speaker earlier made an appeal for brevity in speeches. At this stage I reinforce that plea. I believe that 12 hon. Members are still anxious to take part in the debate in the approximately 70 minutes remaining before the winding-up speeches. I can accommodate them all if they restrict their speeches to about seven minutes each.

7.53 p.m.

Mr. R. E. Bean: Several hon. Members have spoken of their concern about the problems affecting the construction industry. As one who has spent most of his working life in this industry, I share their disappointment that the Chancellor of the Exchequer has not seen fit to give an injection of money to the industry. Earlier this afternoon my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said that about 170,000 men were out of work in that industry. If we add to that total another 100,000 men who have lost their jobs in the building material supplies industry, it will be apparent that one in five of those now unemployed come from the construction industry.
The Government have played their part in trying to speed up house building. By their loan scheme they have enabled the building societies to ensure a steady supply of capital to the private house market. The Government have given every encouragement to local authorities to proceed with their own building schemes. My own local authority, the Medway Borough Council, will have 2,000 houses under construction by the middle of next year. If we can do it, I am sure that other areas can. I was surprised to learn that that is equal to the annual output of the Greater London Council.
We want to stabilise demand. Figures released earlier this week show that the house-building programme is increasing and if the Chancellor of the Exchequer has forecast aright and if the economy will lift off next year, there will be overheating in the building industry, excessive demand from the private and public sectors, and a need for new investment. Therefore, we need a means of stabilising the situation in the construction industry. That is vital, because the construction industry is the most labour-intensive industry in the country and in order to stabilise employment, we must stabilise that industry.
For many years the Trades Union Congress and the Union of Construction, Allied Trades and Technicians, a major building union, have advocated a public procurement board. Such a board would try to stabilise contracts throughout the country, region by region and area by area, so that we did not have over-heating in one area, or the ridiculous situation that existed in my area in which the Government were building a new barracks, the Central Electricity Generating Board was building a power station and a motorway bridge was being erected at the same time, all within a radius of five miles. The net result was that local industry could not cope.
A public procurement board would even out the placing of contracts and try to give industry stability. Something must be done now. Approximately 250,000 workers—one in five—in the building industry are unemployed. I am extremely disappointed that the Chancellor has not seen fit to inject money into the industry by allowing repairs schemes to go ahead and the Government's scheme for housing

action areas to proceed. Those two measures would take this labour-intensive industry back into full employment again. In a year's time, when the industry picks up, that work would be stopped. One of the problems is that it takes nearly 18 months from the time a decision to build is taken to the start of construction,
The situation in London is far worse than it is in the rest of the country. It takes the GLC nearly five years from the time it decides to build a council house to the actual start of construction. The net result is that when the Chancellor injects money, we do not see the effect until 18 months later, with disastrous results. A public procurement board would iron out many problems.
It has also been said that if we keep investing in industry, productivity will increase, but so will unemployment. That I accept. I understand that, according to their declaration of strategy, the Government intend to create new industries.
I suggest that the Government consider two matters. One of the major problems facing the world is a shortage of homes. The United Nations report published two years ago said that there was an annual demand in the world for 40 million new homes. Surely, with the industrialised building methods that we have in this country, we could help to overcome that problem. We could carry out the manufacture of sections and components in this country, export them and have them constructed abroad. In this way we could shift factories to areas of high unemployment.
The Government should also consider expansion of North Sea oil development. I have yet to learn of any proposals by the Government for North Sea oil when it is landed. I am sure that we shall not put it straight into our petrol tanks. I am told that it is a light oil which, I understand, means that it is adaptable for use in petro-chemical plastics, man-made proteins and fertilisers. If that is so and if we are talking about the maximum flow of oil coming ashore in 1980, we should be considering a plan to carry out the work now.
Using industrialised building methods for new homes for export and creating new industries based on North Sea oil are two ideas which the Government should be investigating now.

8.0 p.m.

Mr. Alexander Fletcher: I hope that the hon. Member for Rochester and Chatham (Mr. Bean) will forgive me if I do not follow up his remarks. I should like to refer to the remarks of the hon. Member for Caernarvon (Mr. Wigley) and those of the hon. Member for Perth and East Perthshire (Mr. Crawford) because, judging by the speeches of both of those hon. Members and their voting record, they are not lovers of competition or a competitive market, yet in this debate they were arguing for a strong kind of competition to take place within the United Kingdom—a competition for jobs. They want Scotland, Wales and England to compete with each other, to cut each other's throats in a diminishing job market and in a fight that would result in the survival of the fittest. I cannot imagine that that argument, presented to the people of this nation, can have anything other than a unifying effect rather than inviting the separatism that nationalist Members advocate.
In the week when, clearly, the kidding about jobs in this country had to stop, and in a debate as urgent to people's livelihoods as this one, it is very sad that the Labour Benches are so nearly empty. It is sad that those who advocate employment and jobs and pretend that they know how to create and to save jobs are so sparse in their attendance, not least the Scottish Members—usually among the most vocal, and who tonight are presumably finding something else to attract them and to attend to.
Since the war there have been countless false alarms about a real slump in employment in Britain. Perhaps I should say that the alarms have not been false, but that this House has chosen to make them seem false. On many occasions we have warned of the need to tighten our belts, only to ease the strain even before the first notch has been reached. However, there is nothing false or muted in the alarm bells ringing now for workers in Chrysler, British Leyland, Rolls-Royce, the British Steel Corporation, and many other companies.
No one in this House can escape responsibility for this ugly state of affairs. For General Election after General Election

we have all promised too much and have then achieved too little, adding to the disillusion and distrust that is evident throughout Britain. For the Government and their supporters there can be little good will this Christmas. At election after election there was no problem that they could not solve, by increasing public expenditure in subsidies, by further nationalisation, or by the creation of enterprise boards. The Labour manifesto, which is so cheerfully quoted by Labour Members, said
Vote Labour and we will save your job".
Now the men who have advocated adhering to the terms of that manifesto will be lucky to save their own jobs as Members of Parliament for constituencies in the Midlands, Merseyside and Clyde-side when the next General Election comes.
At election after election, Labour said that it was only wicked Tories who talked of low productivity caused by overmanning, and of market forces that insisted upon the production of goods that people actually wanted to buy. I suggest that the CPRS Report has put paid to that bit of propaganda from Labour Members.
As many other speakers in the debate have said, it is young people eager to start their careers who are bitterly disappointed by the events of this week and by the fact that the Chancellor showed so little imagination in the proposals he made to the House today. Young people want to start new careers, to fulfil their ambitions, and not to be given a number of odd jobs to do. My hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) was absolutely right when he said that the Chancellor had started at the wrong end of the age scale. I hope that in replying to the debate the Secretary of State for Employment will give an indication that there is indeed some flexibility in his mind and in his Department regarding the possibility of early retirement for older workers, rather than odd jobs for young people.
In Scotland, fearful of the effects that this failure of Socialism will have on their chances of being re-elected, Labour Members of Parliament are preparing a new slogan. They are no longer advertising the benefits of Socialism. They


are still intent upon kidding people about the real facts of economic life, but now the slogan is, "Vote Labour and have a Labour Government in Edinburgh as well as in London". That is two Socialist manifestos for the price of one vote. That is the escape that Labour Members are offering to the Scottish people. That might be good for the employment prospects of those joining the Civil Service, but it is not a particularly hopeful prospect for the bulk of the population in Scotland who depend on industrial activity for their livelihood.
However, there are two other bodies that have to meet the challenge of this crisis of employment. The first is my own party—the Conservative Party. The other is the management side of industry. Clearly, it is not enough for Conservatives to be impeccably correct in their economic reasoning and economic argument and to enjoy the best credentials in regard to unemployment statistics. We must show our concern and our compassion for the victims of Socialism, for those whose reward for voting Labour is now a place in the dole queues throughout Britain. That means that our plans for economic revival must be based on profits as a spur to investment, a competitive market economy, and on real incentives for the self-employed, who create jobs, and for the entrepreneur. In addition to this, we require new and effective programmes for the retraining and improved mobility of labour.
In short, we face the obligation to present a new deal to the British worker and British consumer, a new deal which will give him renewed faith in himself, in his company and in Britain.
It is essential that managements regain confidence in their ability to lead, to innovate and to communicate with workers. For far too long managements appear to have sub-contracted industrial relations to union officials, many of whom do not themselves represent or even understand the best interests of workers. The result is that there is a vacuum in our man-management relations, from which so many of our industrial problems are derived. It is a vacuum that can be filled not by the Government and trade union leaders getting together day after day, week after week, to talk things over at Chequers, Downing Street or elsewhere, but by industrial leadership.
If the Chancellor of the Exchequer really understood the problems of this country, he would today have given the incentive to industry and the encouragement to industrial managers to pick up the reins of leadership again, with the confidence that the Government are not trying to block their way but are trying to assist economic and industrial progress. Unfortunately, the Chancellor failed to do so. That is why there is so much disappointment in the House and in the country tonight. That is why I shall vote against the Government.

8.9 p.m.

Mr. Michael McGuire: I represent a constituency which contains Skelmersdale New Town, which has an admitted rate of unemployment of 10 per cent., or just over that figure, according to statistics issued by the Department of Employment. However, I believe that the true rate of unemployment there is nearer to 13 or 14 per cent. The rest of the constituency has a rate of unemployment that is well above the national average.
Therefore, hon. Members will understand my keen desire to speak in this debate, and particularly because in the Chancellor's speech and review of policy he mentioned two industries which are the linchpin of Skelmersdale—namely, Courtauld's textile factory, and Thorn's colour television tube factory. They are the two biggest employers in the new town.
I was disappointed by the Government's cuts in public expenditure. For Skelmersdale they have meant the postponement of the planned new hospital. No starting date has been announced. The land has been allocated for a long time and the hospital was intended to be built by now. An announcement of the starting date would give a badly-needed boost to the construction industry in the North-West, and it would provide good employment prospects for our skilled young people. Hospitals today are very diffierent from those of the past.
To have a new town without a new hospital makes a mockery of planning. I look forward to hearing the date for the start of building. The hospital would help to overcome some of our bad medical facilities. Having no new hospital in


the new town, we have to depend on already overloaded facilities in Ormskirk and Wigan.
Because of shortage of time, and because some of my hon. Friends will deal with the subject of the textile industry I shall leave unsaid some of the things I had intended to say about textiles. But I must say that I am very annoyed about the almost unhurried pace at which the Government have dealt with the industry's problems, which it has faced for the past 12 or 18 months. It was interesting to see how the Government could be galvanised into action over the Chrysler car crisis, where the expected loss of jobs does not match the number lost in the textile industry in the past few months. Jobs are continuing to be lost every week in the textile industry.
Whatever is noticed in Scotland, the Government's action will not go unnoticed in North-East Lancashire, and it should not. As sure as night follows day, there will be retribution for us on the Labour Benches, and it will quickly mean that we will be transported to the Opposition Benches at the next election.

Mr. Alexander Fletcher: The textile industry did not have a Riccardo. That was the hon. Gentleman's problem.

Mr. McGuire: Delicate political considerations caused the Government to arrive at their decision about Chrysler.
The White Paper, Cmnd. 6315, "An Approach to Industrial Strategy", says that the Government do not believe in formal, rigid plans. They like freedom of movement so that they can respond to situations. That is very convenient for them, especially in the Chrysler situation. If ever there was an example of responding to a crisis rather than thinking the matter out, that was it.
I should like to make two more brief points, the first concerning import controls on television colour tubes. I am told by the people at Thorns that they have presented irrefutable evidence to the Department of Trade that the Japanese are dumping television tubes in this country. The Department, in its leisurely way, taking time to consider everything, as statesmen will, has sent representatives to Japan to examine the evidence, and it has said that the case has not been proved.
Anyone making such a case has to prove that the dumped articles are damaging the economy or damaging a particular industry. The television tube industry has been damaged. But it is more difficult to prove that the dumped goods are being sold at less than the cost price in the country of production. In the case of television tubes, with the Japanese having a vertically integrated television tube and manufacturing industry, that is impossible to prove.
But I use my common sense. In my home town of St. Helens Pilkington has the most advanced glass-making factory in the world. We can be proud that Pilkington's invention of float glass brings in several millions of pounds' worth of foreign currency a year. The company has invested a great deal in new plant for this new industry. Literally just down the road from the factory is the Thorn colour tube factory, which is also very modern. There is no problem of transport between the two, because they are only a few miles apart. Neither I nor the people in those factories will be convinced that a tube that has to come thousands of miles can compete fairly.
The problem with import controls is that hon. Members and, more important, the Department of Trade profoundly believe that everybody else plays to the rules as we do, that they are all gentlemen. The people of this country have been taken for a ride. We have been taken advantage of. I have asked Questions about the matter. I believe that once a prima facie case of dumping has been made out, the onus should be on the exporting country to disprove it.
The agent should be held responsible. That happens in many other countries, and we have to put up with it. We should not let our industries go to the wall because we do not have proof of dumping that would satisfy someone in the High Court, although it satisfies those in the industry who provide the information. We should act on that information
I read the article by my right hon. Friend the Chancellor of the Exchequer in the Sunday Times. I worked for a living before I became a Member, and I am not talking as a theoretician. If I may say so respectfully, and begging pardon for the expletive that is to come


—though it is very mild by modern standards—I know what it is to be buggered about by bad managers. Therefore, I know what I am talking about when we discuss productivity. In my right hon. Friend's important article he says that it is no good our crying "More investment." It must be matched by a productive capacity, which in the long run means that we can export against our competitors. We should all try to get that message across.
The reason for our doing so badly is probably a combination of many things, including bad managers, certainly. They are not all bad, but there tend to be some, and perhaps a lot, who are. Other factors are the response of trade unions to changing conditions in the factories, and undoubtedly lack of investment. But simply to speak of lack of investment is cruelly to deceive our people.
We must examine the problem far more thoroughly. We should have plain speaking on the matter, particularly from my right hon. Friends in the Government. This is a battle that we must win. The challenge is to us all. I know that with the trade unions and their wit and wisdom, with good management and with the right investment, we shall win this battle for the people of this country.

8.9 p.m.

Mr. David Mitchell: We are debating unemployment. I want to draw attention to a large section of jobs, a third of the jobs outside the public sector, but the forgotten third, the overlooked sector—the small businessmen.
Hon. Members on both sides of the House have spoken up for the industries in their constituencies—the textile industry, the glass industry and various other industries in different parts of the country. I want to speak on behalf of the thousands of small businessmen in every constituency, who not only provide a third of the jobs in this country but have the potential to provide a much larger amount of employment.
I am sure that the hon. Member for Liverpool, Walton (Mr. Heffer) will agree with one or two of my remarks. We must recognise that businesses are alive. They are not dead entities in set patterns on pieces of paper. They are living organisms. They all start as small businesses.
They grow, grow even larger, then get old and, just like old people, they get set in their ways and their bones and they die—unless the Government come along and prop them us as lame ducks. Their place is taken by the new generation of small businesses, backed by young talent, growing into larger businesses, and it is important that we should recognise that factor.
It is important because the next upsurge in the business cycle will undoubtedly contain a large proportion of the know-how that existed in the smaller firm. New products are required in many parts of the world. It has been estimated that by 1986 half the commodities exported at that future date have not today even been invented. They comprise production that will take up the capacity of industry in the future.
Therefore, we should examine how best we can encourage the smaller business sector and enable it to do more to help our economy. That sector of business activity provides jobs and contributes to our GNP. It also provides something else—namely, the accumulation of knowledge upon which people can build. Let me give an example of this process. After the last war we saw in Denmark and Scandinavia in general the emergence of a new generation of cutlery and glass design. In almost any shop in Europe one is offered the finest glassware from Scandinavia, but before the war Scandinavia was not noted for those products. That situation arose because small businesses in Scandinavia were encouraged to produce the know-how and to use that information in building up business. That is what those industries did. Similarly I believe that we should seek to build up thousands of small firms into the next generation of expanding businesses.
The Government have led us to believe that they recognise the importance of this activity. Indeed, they said in their White Paper, "The Regeneration of British Industry":
… in times of economic difficulty it is often the small businessman, dependent to a great extent on personal wealth as a source of finance, who suffers the greatest hardship. The Government are therefore reviewing the problems of small businesses and will put forward separate proposals to cater for their special needs


But where are those proposals? How will they come forward? Will some Minister tell us? We are entitled to know. Again, I believe the hon. Member for Liverpool, Walton, agrees with me. I want to know what is proposed for the future.
I was sad to see nothing on any NEDC agenda or indeed at the Chequers talks dealing with the problems of small businesses. I recently sought to table a Question to the Chancellor of the Exchequer asking whether he has any plans to increase the financial incentives to small businesses. However, what answer did I receive? I was told that the question of financial incentives to small businesses was a matter for the Secretary of State for Industry. But if I were to table a Question to that right hon. Gentleman, I know what the answer will be. The junior Minister concerned will rise to his feet and tell me that it is a matter for his right hon. Friend the Chancellor of the Exchequer.
When we see one Minister after another shuffling off his responsibility to somebody else we appreciate that he may be his hon. Friend but he is no friend of the small businessman.
Where do we go from here? We all appreciate that the situation is deteriorating. We have only to look at the latest bankruptcy figures. In the first nine months of this year the number of liquidations rose by 52·7 per cent.
The small business is neglected, and it is a sector of activity that needs attention. The small businessman needs to be less managed by government. I shall not go over all the points made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) who dealt with this point admirably. Those small businesses need money not Government subsidies, they need to see more of their own money left in their own businesses for the purpose of investing in the way they believe to be right.
The hon. Member for Ince (Mr. Maguire) referred to the quality of investment. There is no question that small businesses make a better use of investment and produce a better return on investments than do large businesses. That statement can be backed by statistical evidence.
The Chancellor of the Exchequer may say that he has not the money to leave in the hands of small businesses so that they may use that capital to grow into a large concern. My view is that we shall never get out of our present mess unless we take steps such as those I have outlined.
However, the Chancellor appears to have the money to spend £162 million on rescuing Chrysler, as we saw yesterday. Let us suppose that one was buying a car and the salesman said, "You can have £35 if you take the car away". One thinks twice before buying such a vehicle! The Government has been talked into spending £162 million, instead of accepting the company almost as a free gift with £35 million. What a difference that sum would have made to the situation if it were injected into the small business sector.
I have now been speaking for 6½ minutes—

Mr. Deputy Speaker: Order. The hon. Gentleman has been speaking for almost nine minutes.

Mr. Mitchell: I am doing my best to bring my remarks to a speedy conclusion.
Any business, small or large, requires three things if it is to create jobs. First, it requires men with skill and I welcome the Government's retraining scheme to enable people to possess those skills for the time when business picks up. Business also needs capital, and we need to encourage people to invest capital. However, we shall never obtain that capital if the Chancellor continues to foist upon those people taxes by the score—capital transfer tax, wealth tax additional investment surcharge on income and other special taxes levied against capital.
Industry also needs motivated management. I have no time now to go into that wide subject, but there are ways to motivate management if we are to get our economy moving again.
I apologise, Mr. Deputy Speaker, if I have spoken for nine-and-a-half minutes. I am grateful for the indulgence of the House and I hope that I have drawn attention to the importance of the growth of the smaller business for job creation.

8.30 p.m.

Mr. Mike Noble: Usually when I have been called to speak it has been shortly after you, Mr. Deputy Speaker, have made a request to the effect that speeches should be kept to about seven minutes. I am betginning to wonder whether it is a question of cause and effect.
I want to concentrate upon those parts of the Chancellor's speech that dealt with import controls, because in my maiden speech on 4th November last year I asked for selective import controls to be imposed upon textiles and footwear. I remind the Government of the importance that our party has always attached to observing conference decisions and acting in a democratic party spirit. I draw the attention of the Department of Employment and the rest of the Government to the fact that there is now unity in the whole of the Labour movement, including the Parliamentary Labour Party, for effective, selective import controls. That unanimity does not, apparently, extend to the Cabinet.
If we are to judge the Chancellor's statement today we must do so against what has been said by various Government spokesmen in the past few months. They have said that they wish to retain a viable textile and footwear industry. They have said that they will defend industries against injurious imports. They have said that they will protect those industries which will have a viable capacity when the recession recedes and the economy picks up. Yet what has happened today? In my view the Government have taken a small and tentative step in the right direction. That is to be welcomed. But it is a very small and tentative step.
If we examine the Government's action we can see that in their decision on textile imports they have endorsed decisions already taken through the Multi-Fibre Arrangement and the burden-sharing agreement. These are important steps that have been taken in Europe and that will have a long-term effect. The Chancellor said today that there will be a low rate of growth in textile imports. When we have 6,000 workers in the cotton and allied sectors alone without jobs this year we cannot afford any growth whatever. Yet the Government

are still bleating about our having only a low rate of growth.
Our quota levels are not realistic. Western Germany has the second highest quota level in Europe, yet its imports amount to only 83 per cent. of our figure. Western Germany is way ahead of the rest of the Community. Our growth rates are based at a high level. Although we may talk of burden-sharing, it will have no effect at all on the industry except to further its decline over the next five years at least.
I welcome what the Chancellor said about Spain and Portugal. Spain has been the most rapidly growing exporter of textile goods to this country. I understand that in quantity terms the Chancellor's proposals will amount to a reduction of between 800 tons and 1,000 tons over the next 12 months. The same applies to Portugal. For the past 20 years we in the textile industry have been saying that action should be taken against these imports. Again, the action taken is too little and too late.
What do the Government intend to do about the quota restrictions imposed against Greece and Turkey? Are these to be maintained next year? What steps are to be taken about the free circulation of imports from EEC associates into other countries in the Community and thence into this country? When will the Government give us a clear statement about the quantitative effects of the restrictions that have been introduced?
Turning to footwear, I assure the right hon. and learned Member for Surrey, East (Sir G. Howe)—who said that he was afraid of quotas—that the Government appear to have perpetrated a minor economic miracle in the footwear sector. On 23rd May the then Under-Secretary of State at the Department of Industry reported an agreement on footwear imports with the COMECON countries. He said that it would result in 300,000 fewer pairs of shoes coming into this country. That figure was based on 1974 levels. If we examine the January-July 1974 statistics we find that 5,186,000 pairs of shoes came into this country. In the same period in 1975, only two months after the statement, 4,947,000 pairs of shoes entered the country. That is a reduction of 239,000 pairs of shoes. That


was achieved without the operation of the quantity restriction.
As a result of the recession there has been a reduction in the amount of footwear entering the country. The Government can be likened to a man who builds a door to stop the rain coming in but leaves a four-inch gap at the bottom. There is still sufficient room for imports to flood into this country. We are already in great difficulty. I cannot understand the logic behind the Government statement on footwear. I welcome that part of it which extends the restriction—if it is a restriction—to women's and children's footwear.
We need some effective action. I warn the Government that, although I have said that they have taken a tentative step in the right direction, the campaign waged by textile members in the last 14 months will continue and hot up. To the Whips I say that we shall reconsider our tactics after we return in the new year. It appears that there are hon. Members who, because they occupy a particular position in the political spectrum, can get away with murder. The North-East of Lancashire is not going to suffer any longer, nor is the North-West as a whole, and we will take all the steps there are to make the Government come to their senses. We do not accept that in present circumstances there can be any growth whatever in textile imports, nor do we accept any ridiculous statements about footwear.
I endorse what my hon. Friend the hon. Member for Ince (Mr. McGuire) said about dumping. It is a fact that 20p shirts are coming from the COMECON countries, but no action has been taken. It is a fact that 37p garments are coming in from the Far East, but no action has been taken. There is dumping of PVC, which affects the footwear industry, and no action has been taken. We shall push for a long-term regulator for the textile industry, so that the traumatic experience of the last 15 years, when the labour force was reduced from 260,000 to 75,000, will not be repeated. I hope that the Government will take my words to heart, because this is a serious warning. If the Government do not take them to heart now, the electorate will.

8.38 p.m.

Mr. Esmond Bulmer: In their White Paper, "The Attack on Iinflation", the Government said:
Last year profits were so low that they were insufficient to finance stocks and work in progress and replace existing fixed capital, let alone expand it. If both the public and the private sectors are to increase investment in the future, they will need adequate resources for the purpose; otherwise the necessary improvement in job prospects and living standards will be put at risk.
This is quite right, and we heard nothing from the Chancellor today to change it. Investment return in all industry in recent years has dropped from 10 per cent. net of stock appreciation to 2 per cent. If that figure is not reversed, no measures will be enough to reduce the tragic unemployment figures.
My right hon. Friend the Member for Worcester (Mr. Walker) spoke powerfully about the social contract, whereby earnings had gone up by nearly 50 per cent. while output had not risen at all. This situation is certain to create unemployment, has done so, and is continuing to do so. Trade unions have grossly over-egged the pudding by encouraging the Government to push through legislation much of which might be commendable at the right time but which now has the effect of pricing goods out of the market, both at home and abroad.
Any hon. Member who has a farming constituency will know that equal pay for women, for example, damages our poultry industry in terms of its competition with French farmers. The Employment Protection Act, which makes it a responsible action to employ people, has concentrated the minds of management on keeping those they have, but made them reluctant to take on anyone else unless they can see that doing so is absolutely justified. Therefore, I fear that the outlook for school leavers next year will probably be worse than this year. On top of this, by giving security of tenure in respect of furnished accommodation the Government have made it difficult for people to move around the country looking for jobs.
We would all agree that there has been too much interference in industry, by all Governments, but in my constituency it


is the operations of the Price Commission which give rise to the greatest concern. I quote a letter that I received from a builder in my constituency. He said:
You will appreciate that Building and Civil Engineering Contracting is a very financially hazardous industry, and that contracts are obtained in competition, therefore at the lowest price, and that a profit is not always made on all contracts. To restrict this Company to a profit of 2 per cent. on turnover where such financial risks are taken is unrealistic for this industry, and does not seem just when competitors may continue to make 6 per cent., 7 per cent. or even higher.
He goes on to explain how the operations of the Price Commission have put at risk 200 jobs in my constituency.
Equally, many major companies engage in investment overseas, because if a company can see that it can control the return it gets in one country, it would rather invest there than in a country where it cannot control the return. There are other arguments on tariffs which make overseas investment essential anyway. Thus, the effect of the Price Commission is particularly damaging at present. I hope that the Government will accept the advice of the Bank of England in this respect.
There is also in my constituency the tragedy of two boatbuilding firms which have found their livelihood threatened overnight by the 25 per cent. value added tax. The full damage is hard to estimate, but the feeling of bitterness of someone who has put in a lot of hard work in building up a business, employing people and giving them a livelihood, only to find it all wasted by Government action, is appalling to see.
There is also the Government's refusal, when they interfere, to do the things that we would like to see, particularly in the West Midlands, where unemployment is up by a factor of three. We look to the Government to revise their policy on industrial development certificates.
The stop-go policy associated with too many Governments has particular problems for our industries. The carpet manufacturing industry, which is strong in my constituency, welcomes the relaxation of hire purchase, but it found it difficult to plan when it did not know which way the Chancellor would deal with demand. If it had based its plans on his forecast of the inflation rate, it would have been in an even more serious position, but mercifully it did not.
Equally, jobs in my constituency were taken away by the closure of a defence depot. Hundreds of jobs were lost after three changes of policy. The people whose jobs have been lost could easily have found others two or three years ago, but because they had to hang on they are now having to look for other jobs in difficult conditions. That also indicates a lack of sensitivity by the Government.
Most damaging of all in Government policy has been their determination to penalise the creative and subsidise the inefficient. My hon. Friend the Member for Basingstoke (Mr. Mitchell) has made clear the effects of capital taxation on medium-sized and growing businesses. Many hon. Members feel that their constituencies are too dependent on one industry and will be sympathetic to the need to encourage small businesses so that there can be more diversification of industry. If the Government continue to treat the creative so cavalierly they cannot be surprised if enterprise is lacking.
Equally, the Government's attack on management is immensely damaging, together with the high levels of taxation. It means that even to keep pace with inflation pay rises have to be given which appear to be enormously divisive. I hope that I have given to the House some illustrations of the way in which Government policy has made life difficult for industry in my constituency and has created unemployment. I hope that when the Government consider what they can do to improve the present situation, they will seek to work with private enterprise and not against it.

8.45 p.m.

Mr. Robert Kilroy-Silk: I welcome the Chancellor's announcements, little as they are. They will go some way towards ameliorating the worst effects of the present unemployment situation. Of course, we still have a long way to go. I hope that subsequently the Government will attempt to start on the road to a higher level of employment. I support the Government's rescue of the Chrysler motor car company, but not the way in which it has been carried out. I should have preferred a larger element of a public stake. The important factor is that we are saving jobs.
I represent a constituency in the Merseyside area, an area that has been scarred by years of remorseless, grinding and persistent high-level unemployment. I appreciate only too well the terrible effects on morale, on families, on towns and on the whole environment of long and large-scale and persistent unemployment. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) demonstrated a similar appreciation in a moving speech. Merseyside has had high levels of unemployment for a long time and has experienced attendant social problems such as poor housing, inadequate local amenities and a high level of social deprivation.
I have listened to what I think most hon. Members would agree to have been constructive speeches from both sides of the House, with the exception of the contributions from the nationalist parties. I believe that they were disgraceful, selfish, parochial speeches. It is natural that we are all concerned with our constituencies. We have a duty to draw to the attention of the Government the problems that we find in our constituencies. If we do not do so, no one else will. However, it is not our function to engage in some kind of crude bartering, setting one section of the community, or one section of the country, against another. It is necessary for us to have some sense of priorities.
I have listened to those who have spoken movingly about their constituents and the high levels of unemployment in the areas that they represent. They have spoken of levels of unemployment of 4 per cent., 5 per cent., or 6 per cent. Even though I have been called at this late hour, it is necessary that I should point out that there is 11·1 per cent. male unemployment in Ormskirk and 12·2 per cent. male unemployment in the Merseyside special development area.
The highest unemployment rate amongst males in the whole of Western Europe is to be found in Kirkby—namely, 25 per cent. There are now 73,000 men unemployed in the Merseyside special development area. In the pipeline there are further lay-offs in the shipbuilding and ship repairing industries and in Plesseys and Pilkingtons. That is despite the special development area status, the regional employment premium, advance factories and all the paraphernalia that

successive Governments have had in their armoury to help the regions. Merseyside has 50 per cent. of the total unemployment in the North-West in spite of the regional policies of successive Governments.
The problems faced by Merseyside are not new. In common with other areas, it has been hit by the international recession. It is unfortunate that it has always been hit harder by recessions than other parts of the country. It has never enjoyed a boom. Apart from experiencing a level of unemployment higher than that in any other comparable area, it has also been subjected to a slow but rigorous decline of its productive capacity and industrial infrastructure. If we do not check the decline now, there will be catastrophic consequences in future.
In Merseyside we have experienced a net loss of 71,000 jobs in the past decade. A brief glance at the vacancies compared with the registered unemployed is a depressing experience. There is one clerical vacancy in Ormskirk to 59 registered unemployed males. There are no labouring vacancies to 207 registered unemployed males. In Kirkby there are no vacancies for general labourers as against 2,196 registered unemployed males.
In the Merseyside special development area the situation is even worse, there being 18 vacancies for labourers as against 29,162 registered unemployed males. The figures become more alarming and depressing as one continues to examine them. In addition, there are thousands of school leavers who have grim prospects and blighted futures because of the lack of viable employment opportunities in the area.
On Merseyside, we face a crisis of morale and a crisis of confidence in terms of people's confidence in themselves and in the future of Merseyside. That confidence has taken a severe blow as industry has steadily and remorselessly moved out of Merseyside and employment opportunities have gradually decreased.
We believe that Merseyside—especially Kirkby, which has been highlighted in a special police report recently as a crisis town—is now a crisis area which requires special attention and special assistance. In view of the high level of unemployment on Merseyside and in Kirkby, I


ask my right hon. Friend to give Merseyside the status of Wales and Scotland and to set up a Merseyside development agency to co-ordinate planning and investment for Merseyside.
We believe that Merseyside is a crisis area which requires special assistance and special help. My right hon. Friend should ask for an urgent meeting between the Secretaries of State for Employment and Industry to review the long-term employment prospects of the area, to look at its structural problems, which are very deep-rooted, and to attempt to reverse the trend towards decline.
I suggest also that the area should be marked out as an extra-special special development area by giving us, for example, the headquarters of the nationalised shipbuilding industry. We need additional resources. Hon. Members on both sides have pointed to the construction industry. On Merseyside we have 14,000 unemployed, yet, as my hon. Friend the Member for Walton pointed out, there are 22,000 people on the waiting list for houses on Merseyside. We need £85 million spent on housing repairs in Kirkby alone. We need a new hospital in Skelmersdale. Most of the old Victorian schools in the Ormskirk rural area could be renovated. We have work there for the building workers to do, and we have the building workers to do it. It is a disgrace that the two have not been matched together for the regeneration of the area. We could also build more Government offices, so that this time we got civil servants to Merseyside.
We canot accept further complacency about the area. The people of Merseyside have been loyal to a Labour Government. They did not return a Labour Government to be on the dole. Labour Governments have done a great deal for Merseyside as a whole, but, in all fairness, it has not been enough. The Government must act, and act now. If they do not mount a rescue operation on Merseyside now, eventually they will have to mount an even bigger one, at a much greater cost to the taxpayer and to the community as a whole.
The situation on Merseyside is destroying people's confidence in themselves, and it is destroying their confidence in a Labour Government. That loss of confidence in themselves and in a Labour

Government would be a tragedy for us all if it were allowed to go any further.

8.53 p.m.

Mr. Reginald Eyre: I listened with sympathy to much of what the hon. Member for Ormskirk (Mr. Kilroy-Silk) said, especially when he referred to the considerable employment difficulties on Merseyside. But it seemed to me that, during the Christmas Recess, hon. Members in all parts of the House should accept as compulsory reading the terms of the election manifesto on which the Labour Party was elected in October 1974. In the paragraphs of it which placed enormous weight on the social contract—undue weight, in the view of most of us—it was stressed that the social contract provided a base upon which promises would be fulfilled in social matters and that these had been fully costed. So we understand the bitter disappointment of the hon. Member for Ormskirk about those aspects of Government policy.
The social contract was also to provide the base upon which the Labour Government declared their determination to restore and to sustain full employment. A little more than a year later the unemployment figures provide sad and deeply worrying evidence of the consequences of that period of Government. In national terms, unemployment has risen from 612,500—about 2·7 per cent—in October 1974 to 1,120,000—4·9 per cent.—in November 1975. All reliable forecasts show that the inevitable consequence of present trends is that unemployment will continue to grow at a disturbingly high rate in 1976.
Looking within those national figures, it is unhappily clear that unemployment has increased at a particularly high and frightening rate in the great industrial towns and cities. There is also an ominous trend in unemployment in industrial areas that have previously enjoyed prosperity and stable high employment. For example, in the West Midlands unemployment has increased by more than 137 per cent. since February 1974.
In these hard circumstances, it is with bewilderment that people in that area read what the Secretary of State for Industry said yesterday—namely:
The redundancies will fall most heavily in the Midlands, where we have the best prospects of providing other work as trade picks


up."—[Official Report, 16th December 1975: Vol. 902, c. 1166.]
People ask how long that will be. The Secretary of State for Industry must be completely unaware of the deep apprehension and uncertainty in the West Midlands conurbation where industry after industry has encountered severe difficulty and even disaster in recent months. There is a great fear that Ministers are being less than candid with people in industrial areas about the depth of the problems that we face.
The Chancellor of the Exchequer created one false dawn in September 1974 when he optimistically forecast better times in 1975. No sensible person in those industrial areas wants to be misled again. False optimism and delay have postponed action to control inflation. The penalty is being suffered with exceptional severity in industrial areas by the loss of jobs.
The one bright spot in the West Midlands is the National Exhibition Centre. I am proud of the support that was given to that great project by the previous Conservative Government. The centre is now being completed in fine style. It will be a focal point for the sales efforts of large numbers of private enterprise companies. The future employment and prosperity of countless thousands of our people depend upon the success and profitability of those efforts.
The Government cannot be reminded too often of the many small and medium-sized companies in the West Midlands which can make substantial extra contributions to the national economy. My hon. Friend the Member for Basingstoke (Mr. Mitchell), in a very good speech on that subject, stressed the tremendous importance of small and medium-sized companies and the extra contribution to employment that they could make. I must repeat his question: what are the Government proposing to do to help those companies in their endeavours? The Government should encourage them, not hinder and burden them.
I want to refer briefly, within the time limit imposed by you, Mr. Speaker, to one important matter raised by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe). Mobility of labour is of national significance. In

these hard times people need and are willing to move to jobs. Despite that, transfers of council house tenancies are extremely difficult to obtain. Goodness knows, it is hard enough for a person to get a transfer from the south to the north side of Birmingham by way of the housing department, but it is well-nigh impossible for council tenants to get a transfer from Birmingham to Leicester, or the other way round. People who want to move to new work are often locked into their present tenancies. Urgent action at Government level is needed to make transfers of this kind much easier, and the Government must also realise that home ownership makes mobility of labour much easier.
Many hon. Members who have lost their seats have been able to move to other constituencies and serve them well because they have sold their houses and bought another in the new constituency. There is no reason why the privilege of ownership should be denied for Socialist doctrinal reasons to thousands of council tenants throughout the country. Socialist attitudes are restricting the spread of home ownership by preventing tenants from buying their own homes, and this causes immobility in the working population and consequently adds directly to unemployment.
This is a matter of tremendous significance to working people. They should be able to move to new jobs. The present system is inadequate and unduly restrictive and the Government should change their attitude towards the transferability of tenancies and the spread of home ownership among council tenants.

9.2 p.m.

Mr. Alec Woodall: When the Government Chief Whip announced, two weeks ago, that this debate was to take place he said we should not use it to belly-ache about the rates of unemployment. The Government knew all about that, he said, sticking out his bottom lip. He urged hon. Members who took part in the debate to say something constructive. I do not intend to bellyache, and I hope that my contribution will be regarded as constructive, but I wish to draw the attention of the Government to the situation in the Yorkshire and Humberside Region in general and my area in particular.
It is significant that only last Friday the South Yorkshire Metropolitan County Council produced a comprehensive economic survey of the Yorkshire and Humberside Region, particularly South Yorkshire. The survey opens with the Hunt Committee's Report of 1969, when the Yorkshire and Humberside Region was granted intermediate development area status. That report is nearly seven years old and it is interesting to look at the criteria contained in it. They were slow growth, a slow rate of addition to industrial and commercial growth, significant unemployment, sluggish or falling employment, a low percentage of women at work, slow growth of personal incomes, low earnings, heavy reliance on industries whose demand for labour was falling, poor communications, and decaying environment and dereliction. On each of these criteria South Yorkshire and my area qualify for more than intermediate status. When are the Government going to do something about it?
The national unemployment rate is 4·8 per cent. In my area it is 9·6 per cent. The national male unemployment rate is 6·6 per cent. In my area it is 12·5 per cent. Last July this figure was 11·8 per cent. The increase is probably made up of young lads who left school in the summer and have still not found a job. We used to depend wholly on the coal industry, but we can do so no longer. Boys used to leave school and know there was a lob in the pits if they wanted one. That is no longer so.
We are told about the Selby bonanza. Here is a beautiful coalfield, which we hope will soon be developed, yet the Selby District Council has expressed serious fears about the probable demand for houses, school places and social services that will arise when the field is developed and that the council cannot meet. My bet is that the National Coal Board will man the Selby pit by transporting its manpower from other localities. My area is 15 miles from the Selby development. I believe that Selby will be manned by miners from the pits in West Yorkshire which, by the time Selby comes into production, will be closed because their reserves will be exhausted. They are much nearer to Selby than my area is
I have a dismal story to tell about female labour in my constituency. For

years the women and girls there have been transported to work in the wool textile areas. Now they are on short time, or mostly on the dole.
On the environment aspect, I pay tribute to my local councillors, especially those members of South Kirkby and Moorthorpe town council who, in conjunction with the rest of the community, gained second place in a nation-wide competition for the tidiest pit village. The people in my area are deeply conscious about the environment, and conditions there are not as bad as some people seem to think.
The situation in communications is a different kettle of fish. My constituency is bounded by a motorway box. On the west side is the Ml, on the east side the A1(M), to the south is the M18 and to the north the M62. However, trunk roads into my area are atrocious. I hope that the Department of the Environment will hear that in mind.
The latest figures I can find for family incomes relate, unfortunately, to 1973, but they are significant nevertheless. For the whole of the country in that year the average family income was £46·16p. In my area the figure was £41·39p. 1 do not think that the situation has improved very much over the last two years. A recent survey by Which? said that Yorkshire and Humberside had the lowest housing costs and the cheapest cost of living. We also have the lowest earnings.
I turn now to the question of growth and investment. For the whole of the country the numbers employed in fast-growing industries amount to 10·4 per cent. The figure for my area is 71 per cent. The comparable figures for slow growing and declining industries are 13·4 per cent. for the country overall and 17·4 per cent. for my area.
I appeal to my right hon. Friend the Patronage Secretary not to accuse me of belly-aching. A few weeks ago I pointed out in the Chamber that under the Hardman proposals for the relocation of Government Departments not one job had been given to Yorkshire and Humberside. Government Departments were transferred to Scotland, Wales, the North-West and the North-East, but not one Department came into Yorkshire. If one had, I have no doubt that it would have gone


to one of the more salubrious parts, such as Harrogate.
I have not belly-ached. I have tried to be constructive. I have done what any conscientious Member ought to do, which is to demand a better deal for the people he represents. My area needs full development area status. We have advocated that for a long time, but so far our pleas have fallen on deaf ears. Will the Government now give us that status? We satisfy all the criteria for a better deal. That we must have, and nothing less.

9.10 p.m.

Mr. James Prior: We have had a long debate in which many hon. and right hon. Members have taken part. It is an apt commentary on the House of Commons that in an important debate on unemployment there should have been so few hon. Members listening other than those who wished to take part. It is about time we looked at our procedures and at the amount of work that goes on in the House if we can muster only 35 or 40 hon. Members for an unemployment debate.
We have heard interesting speeches, many of which have come straight from the heart. I hope that the Secretary of State for Employment will deal with the questions that have been asked and those which I shall ask him, especially the question asked by his hon. Friend the Member for Rossendale (Mr. Noble) about the import of cheap shoes from Eastern Europe. The hon. Gentleman seemed to dislike the Chancellor's announcement. Incidentally, I should like to know where the Chancellor is. He should at least have had the courtesy to come to listen to the winding-up speeches.
The measures announced by the Chancellor amount to the closing of the stable door long after the horse has bolted. On the problem raised by the hon. Member for Rossendale the Chancellor has even left half the door unbolted. The announcement made today might in ordinary times have been an answer to a Written Question, so little has been its impact. Government supporters have spent their time talking about the Government's vacillation and their refusal to take action before now.
The Chancellor, in a little philosophising, said that he was propelled into politics by the unemployment of the 1930s. If he carries on as he is doing, he will be propelled out of politics by the unemployment of the 1970s. The hon. Members for Ince (Mr. McGuire), Liverpool, Walton (Mr. Heffer), Wolverhampton, North-East (Mrs. Short) and Ormskirk (Mr. Kilroy-Silk) and many of my right hon. and hon. Friends all referred to the seriousness of the unemployment figures. The United Kingdom figure, on a seasonally adjusted basis, is 1·125 million, not 1¼ million as many hon. Members said, but it is going up at the rate of 37,000 per month.
My right hon. Friend the Member for Worcester (Mr. Walker) said that in the Midland region unemployment had trebled in two years. In the West Indian community it has quadrupled in the same period. A year ago last November the unemployment figure was 613,000. I hope that the Secretary of State will deal with the IDC problem in the Midlands by permitting a considerable relaxation of the policy to help the area. The West Midlands is now in danger. We saw this coming about. To help the development districts the West Midlands area has been starved of new investment for so long that it is suffering in consequence.
Mr. Iain Macleod used to stand at this Box when the Conservatives were last in Opposition between 1966 and 1970 and accuse the Government of being responsible for 500,000 unemployed. At that time, he could say that only in three months of 13 years of Conservative Government was unemployment over 500,000, while for month after month it had been over half a million under the Labour Government. Now, for two months running and for the first time since the war, we have had over a million unemployed on a seasonally adjusted basis. No hon. Member can escape the conclusion that the figure throughout 1976 will be more than a million. That is the size of the problem we face.

Mr. Max Madden: Does the right hon. Gentleman think that the employment situation in the United Kingdom has been assisted or hindered by our membership of the Common Market?


Would he comment also on the employment levels of our partners in the EEC?

Mr. Prior: I would probably have come to that, but I shall answer it briefly now. Membership of the EEC has had nothing to do with unemployment in Britain over the last year or two. So I dismiss that argument. I have the figures for countries in Europe. It is interesting to see that many of our Community partners now have lower percentages than we. Although Germany's percentage is still fractionally higher than ours, unemployment there is levelling out. Our depression and recession is much later and deeper than that of European countries.
I want to say, with all the force and conviction that I can command, that the Conservative Party has always rejected unemployment as a method of fulfilling economic aims. We stand as committed to a policy of keeping employment high and offering people the chance of a job as any other party in this country.
We must judge the Government's policy against the background of the need to control inflation. The Chancellor can do little at the moment and he has done little today. Reflation is not one of his options. It cannot be while inflation is still running at 24 or 25 per cent. and, as my right hon. Friend the Member for Worcester said, we are paying ourselves 51 per cent. more for producing 5 per cent. less than two years ago.
All that the Chancellor can do is prepare for the upturn when it comes. For heaven's sake let us have less complacency and more humility from the Chancellor about his forecasting. [Hon. Members: "Where is he?"] He still does not bother to come to the House of Commons. During the General Election last year the Chancellor said, on 26th September:
I am certain we can get through the whole of next year with well under a million unemployed.
That was probably the same night that he was talking about inflation at 8·4 per cent.
During his Budget Statement this year, the Chancellor said:
… I think it sensible to work on the assumption that the recovery will be under way by around the turn of the year…

We may…be close to the bottom of the trough."—[Official Report, 15th April 1975 Vol. 890, c. 278.]
He has always got his forecasts wrong, and many people are hurt as a result.
The late Iain Macleod used to say, referring to the right hon. Member for Cardiff, South-East (Mr. Callaghan), that for him the law of averages never worked because he was always wrong. Exactly the same applies to the present Chancellor. He has not yet got one forecast right during the period he has been Chancellor. I hope that when he gets his forecasts wrong, he will not continue to blame other countries for what is happening overseas, because that will get us nowhere.
The hon. Member for Rochdale (Mr. Smith) asked what we would do and what our position as a party was. Given the necessity for getting inflation under control before we reflate, how can we create a situation in British industry and in the economy generally which will help to get expansion going again? The vital factor is the economic climate which a Government can create and the confidence that can come to British industry from that. Everything the Government do militates against that confidence. The Dock Work Regulation Bill, the nationalisation of the shipbuilding and aircraft industries and the measures on Chrysler yesterday add up to a climate not conductive to building up confidence. Overseas investors will not invest their money here or go ahead with building factories. It is a depressing situation. That is the lesson that the Government have not learned, and until they learn it, we shall not make the necessary progress.
I and many of my right hon. Friends greeted the Government's new policy announcement at Chequers with incredulity but relief. We hoped and prayed that our incredulity was wrong, but, unfortunately, we have been proved right all too soon. The Government must have known between a month and six weeks ago when they put forward the Chequers proposals that they would be faced almost immediately with the Chrysler problem. What did they do? They blew very stern about Chrysler to begin with and then totally changed their mind.
Not for a long time have we seen such incompetence from any Government as in this Government's treatment of the Chrysler situation and import controls. We must recognise that if we are to get industry moving we have to support and build on success. This is what my hon. Friend the Member for Basingstoke (Mr. Mitchell) meant when he spoke about the importance of small businesses and the need to give them some incentive.
Will the right hon. Gentleman the Secretary of State give us more information about the financial incentives that the Government have promised for small businesses, or will the Government shuffle it off again by saying that it is not the responsibility of the Chancellor of the Exchequer hut that of the Department of Industry? Who will answer this? How else do we get fobs in places such as Linwood, Ebbw Vale, or Coventry unless new industries go there? The only way in which we can get new industries to those places is to give the incentive and encouragement to individuals and small businesses so that they believe it is worth while and will invest. Each time we prop un an old industry, we handicap the chances of a new one prospering.
There is also the psychological factor to be considered. The belief has grown up that if one makes enough noise in one's jobs, the future is assured. If that is allowed to gain acceptance, it will be a ruination of our life as an industrial nation. It is not cheaper to pay subsidies to keep a business going rather than to allow unemployment if the result of that is merely to put off the day when one actually gets down to reforming one's industry.
We had a new definition of economics last night from the Secretary of State for Scotland who said,
It will also be the cost to the country of the loss of taxable revenue."[Official Report, 16th December 1975;Vol. 902, c. 1295.]
He was then talking about supplying more jobs in Scotland for Chrysler. What he was in fact saying was that if the Government, through the taxpayer, put a lot of money into a company, they would then get the tax from the people who worked in that company back again into the Exchequer. That is the economics of Bedlam. I should have thought

that the right hon. Gentleman would have realised that.
There must be a right to work, but however much we might desire that, it cannot be in the same job, in the same place and with an increasing standard of living. People must be prepared to move. That was a point made by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) when talking about housing.
I come to the Chancellor's proposals concerning job creation. As regards the apprenticeship award scheme, I should like to know what the Secretary of State for Employment will do about second-year apprentices, the apprentices who at present are under the award scheme but will be coming out of the first year next summer. Will provision be made for them to have a second year and subsequent years if they cannot find employment? What will be the deficit of the British Steel Corporation? How many jobs will be saved by the stockpile? Have the import restrictions received EEC approval? What will be the effect on employment, and so on? I hope that we shall have some proper answers tonight. Why has antidumping action not been taken more quickly on a number of commodities which some Labour Members have mentioned this evening?
My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), in an excellent speech, talked about the decline in our industrial sector. The truth is that if we do not recognise this decline as a nation, we have very little chance of success. In terms of investment, technology and human relations, and hence both design and productivity, we are slipping behind a good many other countries. We have to make better use of the investment that we have, as the hon. Member for Ince pointed out.
I want to comment on human relations in industry. I believe that this matter goes absolutely to the root of our problems as a nation. It is not correct, as the Chequers talks seemed to suggest, that it is a question of saying to the unions "It is your job to get the co-operation of your people." The fact is that it is the job of management to get the co-operation of its work force.
Management has had an extremely difficult job in the last few years. However, we do not do management justice,


nor do we do our work force justice, if we believe that the problems are confined to problems on the shop floor relating to the unions, because it is so much the job of management to manage and in far too many cases in British industry management has given up its responsibilities and left them to the unions. I do not believe that that is what the unions want or that it is good for management.
What we need is supervision by management, making certain that management is in charge at shop floor level. We need to have smaller groups and much better communication with those smaller groups on the shop floor. I believe as well that we need consultative councils which can meet regularly and discuss all these matters properly. That is the way in which employee participation can function properly. It does not need to be done by legislation. I think that it needs to be done by action on the shop floor. If we can get that message home, we can make some progress.
There was nothing in the Chancellor's speech today—[Hors. MEMBERS: "Where is he?"] We want to know where the right hon. Gentleman is, but we are quite glad that he is not here. He does not contribute much when he comes, so he might as well stay away.
There was nothing in the Chancellor's speech about the future. We need to know how the right hon. Gentleman will manage the economy through the next year or so. The TUC undertook wage restraint this year on the understanding that by the middle of next year the unemployment rate would start to fall. We all know now, from what the Chancellor has not been able to do today and from what has happened in the last few months, that the unemployment rate cannot fall next year. Therefore, we know that the main basis of TUC support for the Government's pay policy no longer exists.
The Government and the Chancellor had better admit now the extent of their failure, admit that there is no way in which they can reduce unemployment over the next few months. If they say that now, they will command at least some confidence with the work force. If not, they will simply strengthen the hands of those who wish to undermine our pay policy and our fight against

inflation and who seek the collapse of our society.
I do not accuse Labour Members of wanting to create unemployment: I know that they do not. But I am entitled to tell them "Look at what your policies are doing. Look at the record." I am entitled to say that the cynical and dishonest speeches of the Prime Minister will leave a trail of bitterness and suspicion throughout the nation. The Prime Minister accused my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) and me of wishing to see 1½ million people out of work. He added in that speech:
This must be said, and said clearly: A party which contemplates unemployment on that scale is no party to govern and unite Britain.
We do not need to reach that figure to condemn the Government and the Prime Minister. Complacent. incompetent and deceitful, they convict themselves. It is not surprising that in the past two days they have had so little support from the Benches behind them.

9.33 p.m.

The Secretary of State for Employment (Mr. Michael Foot): The right hon. Member for Lowestoft (Mr. Prior) made some remarks about the desirability of the House examining its procedure to see whether some of the difficulties in filling the Chamber throughout the normal parts of the day can be overcome. I believe that whatever differences we may have on other matters most of us agree that something must be done about the load of work imposed on Members of Parliament, to ensure that that can happen. Although I may find it difficult to discover many other statements by the right hon. Gentleman with which I can agree, I agree with that opening remark.
I also agree—and I believe that every other hon. Member who has spoken agrees—with what my right hon. Friend the Chancellor of the Exchequer said at the beginning of the debate. He began his speech, as I do, by giving the number of unemployed. On 13th November there were 1,100,000 workers unemployed, including 40,000 young people who left school this summer and who are still without their first proper employment. That makes a total of 4·9 per cent. of our labour force.
These are appalling figures, and I do not seek in any way to be complacent about them. Indeed, nobody could say that in their period of office the present Government have sought in any way to play down unemployment difficulties. The situation is unacceptable to any civilised nation.
I accept the things that have been said by hon. Members on both sides of the House in this respect. Perhaps they were said most eloquently by my hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Ormskirk (Mr. Kilroy-Silk). We appreciate the situation on Merseyside. Furthermore, I do not seek to qualify what has been said by hon. Members from Wales, because the situation in Wales is appalling. We also know about the unemployment in the Midlands. The situation there has been described by my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) and the right hon. Member for Worcester (Mr. Walker). Unemployment in that area is on a scale unknown since the 1930s.
I disagree with those who try in some way to suggest that the figures are not as substantial as they seem. I believe that the figures are extremely serious. Indeed, in some respects the figures mask some of the unemployment that exists in addition.
I shall not attempt to swap comparisons with the right hon. Member for Lowestoft in relation to other countries. I think that the right hon. Gentleman was mistaken in his approach. The figures in this country are, in all conscience, bad enough, but it is true to say that the figures are somewhat worse in most Western European countries. That is no satisfaction to me, but that is the fact of the matter.
One of my hon. Friends asked about the Common Market. I remember, in the referendum campaign, posters to the effect that it was all "Jobs for the boys in Europe". But there are fewer jobs, comparatively, for most of the boys in Europe than even in this country. However, the situation in this country is bad enough as it is. I hope that we shall not base our arguments solely on that premise. Nothing that I say is intended to mitigate the fact that the Government recognise the seriousness of the situation.
I have no doubt that people will say that in the face of unemployment figures on such a scale the proposals announced by my right hon. Friend the Chancellor of the Exchequer today are not enough. Indeed, I would have been surprised had some of my hon. Friends taken a different view, especially those who know the situation on Merseyside. Of course, those measures are not enough to deal with the problem. We must see how we progress before moving to a situation in which we may have to bring in measures sufficient to deal with the problem.
However, having said that, I am sure that nobody will seek to deride the importance and significance of the Government's measures. They do not solve the unemployment problem—we have never said that they were a major contribution to that end—but they will provide jobs for many thousands of people, and that is important.
Let me turn to the question of the temporary employment subsidy. When an announcement to that effect was made in our debates last July it was not well received by some hon. Members, but it must be agreed that those measures have provided extra jobs for thousands of people. It is true to say that in these critical months that action will rescue the jobs of 60,000 or 70,000 workers—and that is worth doing.

Mr. Prior: Is the right hon. Gentleman now saying that the temporary employment subsidy will rescue the jobs of 60,000 to 70,000 people over the next few months?

Mr. Foot: I said that over the coming months we believe—on the basis of the take-up of the subsidy so far—that that is a proper estimate. We think that it was well worth doing. It does not solve the problem. There is also the subsidy for school leavers. I agree with my hon. Friends who say that that does not solve the problem. I know that. But since it has been applied it has reduced the number of unemployed school leavers faster than they have been reduced in previous comparable months, in so far as the present situation can be compared with that of previous years.

Dr. Hampson: Is the right hon. Gentleman aware that if we take the figures up to the age of 20 rather than the immediate school leaving age it will be seen that we


have never had such bad figures? Does he appreciate that the number may be 180,000?

Mr. Foot: The hon. Gentleman has not fully appreciated what I said. This does not solve the problem by itself. This problem is more serious than any other we have had since the war, particularly as it affects school leavers. All I am saying is that this measure has assisted. There are thousands of school leavers now in jobs who would not be employed were it not for the subsidy. It was worth doing, even though, basically, it is a minor matter.
There is also the job creation scheme upon which I do not want to expand. My right hon. Friend the Chancellor mentioned it earlier. I know that people can pick upon aspects of it and deride it. We say that it is a scheme that has got off to a good start in many ways. It is providing jobs for a number of people, especially young people. It does not remove the chance of people receiving training in skills. We believe that the scheme should be encouraged rather than derided. It does not solve the problem, but has provided extra jobs for thousands.

Mr. F. A. Burden: Is it not a fact that despite all of this, unemployment is increasing at the rate of 37,500 a month? Are not these measures but a drop in the ocean? The right hon. Gentleman is not facing the facts.

Mr. Foot: I have already made the qualifications which the hon. Gentleman makes.
Training is another important aspect of our policy. I shall not give all the figures to the House, but our training measures are having a considerable effect on the employment situation. One of the few good signs in the grim employment outlook is the way in which the number of apprenticeships in the engineering industry has been kept up. In previous recessions there has always been a big slump in apprenticeships, particularly engineering apprenticeships. That has not happened on this occasion. The level has been kept up to normal, despite the severity of the recession. That has been due to measures taken by the Government and employers, and to co-operation by the unions.
The right hon. Member for Worcester asked whether we would consider carrying

on the apprenticeship scheme into the second year. That is a perfectly reasonable proposal to consider. It is the first year of apprenticeship which falls heaviest on the employer and, because of that, assistance in the first year is of major importance. This is not just a matter of a few hundred jobs; this concerns thousands of the most important jobs from the point of view of the future of this country. Amounts have already been made available by the Government for assistance with training on a scale never before considered by previous Governments. The measures we have taken to provide training in this recession have been on a bigger scale than anything done before.
We can build on that. But it does not mean that we are satisfied with it. I was glad to hear what the Chancellor said, because any Minister is glad to hear a hint that the Chancellor has already given in to his proposals. With the Manpower Services Commission, we are preparing further measures to assist with training, particularly for young people and apprentices. One of the reasons why these measures are not included in today's package is the assistance that the Government gave to the Manpower Services Commission in the package announced on 24th September. Some said then that it was only a minor package, which would not have much effect, but already it is enabling the commission to plan ahead. I hope that further measures for training will be put before the House and the country very early in the new year.

Mr. Dudley Smith: This is all very interesting, and it may be admirable, but will the right hon. Gentleman now give some message of hope and comfort to the 5,000 Chrysler Ryton, workers, many of whom are middle-aged and hundreds of whom live in my constituency?

Mr. Foot: I shall come to the Chrysler situation later. I promise that I shall not seek to escape it by any means, and certainly I shall try to cover that aspect.
None of us claims that these measures solve the problem, but our measures for school leavers, the temporary employment subsidy and particularly the measures for training, have made a contribution that helps to curb the problem. But of course


we do not claim that they solve them. It is not only a question of overcoming problems of training and preparing for the time when the economy improves; we want to improve our industrial relations, which has been one of the major objectives of the Government.
My hon. Friend the Member for Newport (Mr. Hughes) referred to the situation at Llanwern, which epitomises the nation's problems. It is not a shortage of investment in Llanwern but a combination of factors—management, differences between some of the unions, and complicated and awkward problems that have to be solved by patience and good will, and by the people working there not pressing their claims to the limit. I believe that with the assistance of the report from the Advisory Conciliation and Arbitration Service we may be able to find a solution. Meetings are taking place about it today.
A major objective of the Government has been to improve industrial relations. In this, we are having some success. I do not deny that many difficulties remain and that many industrial disputes should not take place. I am not passing judgment on their cause, but they inflict grave injury on our industrial performance. I do not deny that. But we are making progress—and perhaps because we are making progress the disputed figures are not quoted so often by those interested in the question.
In the 12 months to October, days lost in industrial stoppages were 42 per cent. down compared with the previous 12 months. The total number of days lost for this year so far is running at less than the average annual level since 1968—that is to say, lower than the average annual level since 1968—that is to say, lower than in any of the years of the last Government and less than one-third of the total of 1972.
I come now to the question of Chrysler. Hon. Members have spoken about it, so I do not see why I should not do so. I have every wish to discuss it, because today we are debating unemployment. It would not have been much good for the Government to debate unemployment in the House today if we were not to point out that 55,000 jobs could have been lost by the closure of Chrysler. One of the considerations that

we have had in mind throughout these anxious weeks has been to save as many jobs as we could legitimately save. That is what we have sought to do. [Hon. Members: "How long?"] Let us take a look. Hon. Members have said that the Chrysler deal is a bad bargain for the country, that the Government put in all the money, and that Chrysler does not put in any. At least, that is the gist of the complaint.
Let us assume for a moment that Chysler in the United States does not go bust. On that assumption, let us look at the Chrysler and Government commitments in this country. It can be seen that they are balanced. If the United Kingdom operation breaks down at the end of 1976—let us assume failure first, and look at success later—we will have lost at most £50 million and Chrysler at least £42 million—£10 million trading loss, £20 million guarantee of basic capital development, £12 million of Alpine capital development, plus any trading losses over £60 million. If the operation breaks down at the end of 1977, we shall have lost at most £60 million and Chrysler at least £60 million—£20 million trading loss, £28 million guarantee of basic capital development, £12 million of Alpine capital development, plus any trading losses over the limits, plus any further capital development. If the operation breaks down at the end of 1979, we shall have lost up to £100 million—£72½ million trading losses and such part of the £27 million capital development not guaranteed by Chrysler as we cannot recoup. In practice, our losses would be well below that figure, but Chrysler would lose at least £95½ million £32½ million trading losses, £28 million capital development, £35 million Alpine capital for development, plus trading losses beyond the limits. This is not a question of the Government putting in all the money and Chrysler taking no risks.
If those figures are compared with what would be the losses if we accepted the total closure to which right hon. and hon. Members are committed—they are committed to a full-scale closure of Linwood and the West Midlands—the loss to the country in the first year, in terms of unemployment benefit and tax loss, would he £100 million—[HON. MEMBERS: "No."] They are the clever business men, who would bankrupt the whole


country. Their policy shows how much they really are concerned about fighting for jobs.
I have sought to describe the worst losses that the country could suffer if the plan were to fail. I say that those losses would be more than covered by the figures that would be paid out in unemployment benefit. We deny that the plan is doomed to failure—[HON. MEMBERS: "Ask Chrysler."] I suppose that the Opposition think that Chrysler is running the risk of losing over £90 million for nothing. Perhaps the Chrysler company knows more about business than does the Opposition Front Bench, but that is no great compliment.
Although there are so many defeatists on the Conservative Benches and throughout the country, I am glad to say that a few patriotic comments have crept into the Daily Telegraph, even on this subject. If Conservative Members read Mr. Kenneth Fleet—[HON. MEMBERS: "What about The Times?"] We gave up The Times years ago. Anyone who expects much support for this country from The Times should have abandoned the idea long ago. No wonder the Conservatives get it all wrong, if they take their policy from The Times. Let them read Mr. Kenneth Fleet in the Daily Telegraph instead. Let them read how the capitalist system is supposed to work—[Interruption.]

I know that the Opposition do not want to hear this—that is why they are trying to shout me down. Mr. Fleet has worked out the figures—

Mr. Peter Rost: Who is he?

Mr. Foot: Mr. Fleet is the eminent City correspondent of the Daily Telegraph. Until this moment he has been freely quoted by Conservative spokesmen in the House. Now that he supports the idea of saving jobs instead of killing them the Conservatives disown him.
We are prepared to debate employment at any time. The Government propose to use every weapon that they can to fight against the menace of unemployment, but it would not have been any good making that assertion and at the same time telling the House and the country that we were conniving to kill over 50,000 jobs.
Let no one be under any misapprehension about what is to take place when we vote. We shall be voting to save 40,000 jobs in Scotland and the West Midlands, and the Opposition will be voting to kill them off.

Question put, That this House do now adjourn:—

The House divided: Ayes 275 Noes 289.

Division No. 19.]
AYES
[10.0 p.m.


Adley, Robert
Carlisle, Mark
Fell, Anthony


Aitken, Jonathan
Carr, Rt Hon Robert
Finsberg, Geoffrey


Alison, Michael
Chalker, Mrs Lynda
Fisher, Sir Nigel


Amery, Rt Hon Julian
Channon, Paul
Fletcher, Alex (Edinburgh N)


Atkins, Rt Hon H. (Spelthorne)
Churchill, W. S.
Fletcher-Cooke, Charles


Awdry, Daniel
Clark, Alan (Plymouth, Sutton)
Fookes, Miss Janet


Bain, Mrs Margaret
Clark, William (Croydon S)
Fowler, Norman (Sutton C'f'd)


Baker, Kenneth
Clarke, Kenneth (Rushcliffe)
Fox, Marcus


Banks, Robert
Cockcroft, John
Fraser, Rt Hon H. (Stafford &amp; St)


Bell, Ronald
Cooke, Robert (Bristol W)
Freud, Clement


Bennett, Sir Frederic (Torbay)
Cope, John
Fry, Peter


Bennett, Dr Reginald (Fareham)
Cordie, John H.
Galbraith, Hon. T. G. D.


Benyon, W.
Cormack, Patrick
Gardiner, George (Reigate)


Berry, Hon Anthony
Costain, A. P.
Gardner, Edward (S Fylde)


Biffen, John
Crawford, Douglas
Gilmour, Rt Hon Ian (Chesham)


Biggs-Davison, John
Critchley, Julian
Gilmour, Sir John (East Fife)


Blaker, Peter
Crouch, David
Glyn, Dr Alan


Body, Richard
Crowder, F. P.
Godber, Rt Hon Joseph


Boscawen, Hon Robert
Davies, Rt Hon J. (Knutsford)
Goodhew, Victor


Bottomley, Peter
Dean, Paul (N Somerset)
Goodlad, Alastair


Bowden, A. (Brighton, Kemptown)
Dodsworth, Geoffrey
Gorst, John


Boyson, Dr Rhodes (Brent)
Douglas-Hamilton, Lord James
Gow, Ian (Eastbourne)


Braine, Sir Bernaro
Drayson, Burnaby
Gower, Sir Raymond (Barry)


Brittan, Leon
du Cann, Rt Hon Edward
Grant, Anthony (Harrow, C)


Brocklebank-Fowler, C.
Durant, Tony
Gray, Hamish


Brotherton, Michael
Eden, Rt Hon Sir John
Grieve, Percy


Bryan, Sir Paul
Edwards, Nicholas (Pembroke)
Griffiths, Eldon


Buchanan-Smith, Alick
Elliott, Sir William
Grimond, Rt Hon J.


Buck, Antony
Emery, Peter
Grist, Ian


Budgen, Nick
Evans, Gwynfor (Carmarthen)
Grylls, Michael


Bulmer, Esmond
Eyre, Reginald
Hall, Sir John


Burden, F. A.
Fairbairn, Nicholas
Hall-Davis, A. G. F.


Butler, Adam (Bosworth)
Fairgrieve, Russell
Hamilton, Michael (Salisbury)




Hampson, Dr Keith
Mates, Michael
Shaw, Giles (Pudsey)


Hannam, John
Mather, Carol
Shelton, William (Streatham)


Harrison, Col Sir Harwood (Eye)
Maude, Angus
Shepherd, Colin


Harvie Anderson, Rt Hon Miss
Maudling, Rt Hon Reginald
Shersby, Michael


Hastings, Stephen
Mawby, Ray
Silvester, Fred


Havers, Sir Michael
Maxwell-Hyslop, Robin
Sims, Roger


Hawkins, Paul
Mayhew, Patrick
Sinclair, Sir George


Hayhoe, Barney
Meyer, Sir Anthony
Skeet, T. H. H.


Heath, Rt Hon Edward
Miller, Hal (Bromsgrove)
Smith, Cyril (Rochdale)


Henderson, Douglas
Mills, Peter
Smith, Dudley (Warwick)


Heseltine, Michael
Miscampbell, Norman
Speed, Keith


Hicks, Robert
Mitchell, David (Basingstoke)
Spence, John


Higgins, Terence L.
Moate, Roger
Spicer, Michael (S Worcester)


Holland, Philip
Monro, Hector
Sproat, Iain


Hooson, Emlyn
Montgomery, Fergus
Stainton, Keith


Hordern, Peter
Moore, John (Croydon C)
Stanbrook, Ivor


Howe, Rt Hon Sir Geoffrey
More, Jasper (Ludlow)
Stanley, John


Howell, David (Guildford)
Morgan, Geraint
Steel, David (Roxburgh)


Howells, Geraint (Cardigan)
Morris, Michael (Northampton S)
Steen, Anthony (Wavertree)


Hunt, John
Morrison, Charles (Devizes)
Stewart, Donald (Western Isles)


Hurd, Douglas
Morrison, Hon Peter (Chester)
Stewart, Ian (Hitchin)


Hutchison, Michael Clark
Mudd, David
Stokes, John


Irvine, Bryant Godman (Rye)
Neave, Airey
Stradling Thomas J.


Irving, Charles (Cheltenham)
Nelson, Anthony
Tapsell, Peter


James, David
Neubert, Michael
Taylor, R. (Croydon NW)


Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Newton, Tony
Taylor, Teddy (Cathcart)


Jessel, Toby
Nott, John
Tebbit, Norman


Johnson Smith, G. (E Grinstead)
Onslow, Cranley
Temple-Morris, Peter


Johnston, Russell (Inverness)
Page, John (Harrow West)
Thatcher, Rt Hon Margaret


Jones, Arthur (Daventry)
Page, Rt Hon R. Graham (Crosby)
Thomas, Dafydd (Merioneth)


Jopling, Michael
Pardoe, John
Thomas, Rt Hon P. (Hendon S)


Joseph, Rt Hon Sir Keith
Pattie, Geoffrey
Thompson, George


Kershaw, Anthony
Penhaligon, David
Thorpe, Rt Hon Jeremy (N Devon)


Kimball, Marcus
Percival, Ian
Townsend, Cyril D.


King, Evelyn (South Dorset)
Peyton, Rt Hon John
Trotter, Neville


King, Tom (Bridgwater)
Pink, R. Bonner
Tugendhat, Christopher


Kitson, Sir Timothy
Price, David (Eastleigh)
van Straubenzee, W. R.


Knight, Mrs Jill
Prior, Rt Hon James
Vaughan, Dr Gerard


Knox, David
Pym, Rt Hon Francis
Viggers, Peter


Lamont, Norman
Raison, Timothy
Wainwright, Richard (Colne V)


Lane, David
Rathbone, Tim
Wakeham, John


Langford-Holt, Sir John
Rees, Peter (Dover &amp; Deal)
Walder, David (Clitheroe)


Latham, Michael (Melton)
Rees-Davies, W. R.
Walker, Rt Hon P. (Worcester)


Lawrence, Ivan
Reid, George
Walters, Dennis


Lawson, Nigel
Renton, Rt Hon Sir D. (Hunts)
Watt, Hamish


Lestor, Jim (Beeston)
Renton, Tim (Mid-Sussex)
Weatherill, Bernard


Lewis, Kenneth (Rutland)
Ridley, Hon Nicholas
Wells, John


Lloyd, Ian
Ridsdale, Julian
Welsh, Andrew


Loveridge, John
Rifkind, Malcolm
Whitelaw, Rt Hon William


Luce, Richard
Rippon, Rt Hon Geoffrey
Wiggin, Jerry


McAdden, Sir Stephen
Roberts, Michael (Cardiff NW)
Wigley, Dafydd


MacCormick, Iain
Roberts, Wyn (Conway)
Wilson, Gordon (Dundee E)


McCrindle, Robert
Rodgers, Sir John (Sevenoaks)
Winterton, Nicholas


Macfarlane, Neil
Ross, Stephen (Isle of Wight)
Wood, Rt Hon Richard


MacGregor, John
Rossi, Hugh (Hornsey)
Young, Sir G. (Ealing, Acton)


McNair-Wilson, M. (Newbury)
Rost, Peter (SE Derbyshire)
Younger, Hon George


McNair-Wilson, P. (New Forest)
Royle, Sir Anthony



Madel, David
Sainsbury, Tim
TELLERS FOR THE AYES:


Marshall, Michael (Arundel)
St. John-Stevas, Norman
Mr. Spencer Le Marchant and


Marten, Neil
Scott, Nicholas
Mr. Cecil Parkinson.




NOES


Abse, Leo
Bradley, Tom
Conlan, Bernard


Allaun, Frank
Bray, Dr Jeremy
Cook, Robin F. (Edin C)


Anderson, Donald
Brown, Hugh D. (Provan)
Corbett, Robin


Archer, Peter
Brown, Robert C. (Newcastle W)
Cox, Thomas (Tooting)


Armstrong, Ernest
Buchan, Norman
Craigen, J. M. (Maryhill)


Ashley, Jack
Buchanan, Richard
Crawshaw, Richard


Ashton, Joe
Butler, Mrs Joyce (Wood Green)
Cronin, John


Atkins, Ronald (Preston N)
Callaghan, Rt Hon J. (Cardiff SE)
Crosland, Rt Hon Anthony


Atkinson, Norman
Callaghan, Jim (Middleton &amp; P)
Cryer, Bob


Bagier, Gordon A. T.
Campbell, Ian
Cunningham, G. (Islington S)


Barnett, Rt Hon Joel (Heywood)
Canavan, Dennis
Cunningham, Dr J. (Whiteh)


Bates, Alf
Cant, R. B.
Davidson, Arthur


Bean, R. E.
Carmichael, Neil
Davies, Bryan (Enfield N)


Benn, Rt Hon Anthony Wedgwood
Carter, Ray
Davies, Denzil (Llanelli)


Bennett, Andrew (Stockport N)
Carter-Jones, Lewis
Davies, Ifor (Gower)


Bidwell, Sydney
Cartwright, John
Davis, Clinton (Hackney C)


Bishop, E. S.
Clemitson, Ivor
Deakins, Eric


Blenkinsop, Arthur
Cocks, Michael (Bristol S)
Dean, Joseph (Leeds West)


Boardman, H.
Cohen, Stanley
Delargy, Hugh


Booth, Albert
Coleman, Donald
Dell, Rt Hon Edmund


Bottomley, Rt Hon Arthur
Colquhoun, Mrs Maureen
Dempsey, James


Boyden, James (Bish Auck)
Concannon, J. D.
Doig, Peter







Dormand, J. D.
Kilroy-Silk, Robert
Robertson, John (Paisley)


Douglas-Mann, Bruce
Kinnock, Neil
Roderick, Caerwyn


Duffy, A. E. P.
Lambie, David
Rodgers, George (Chorley)


Dunn, James A.
Lamborn, Harry
Rodgers, William (Stockton)


Dunnett, Jack
Lamond, James
Rooker, J. W.


Eadie, Alex
Latham, Arthur (Paddington)
Roper, John


Edge, Geoff
Leadbitter, Ted
Rose, Paul B.


Edwards, Robert (Wolv SE)
Lee, John
Ross, Rt Hon W. (Kilmarnock)


Ellis, John (Brigg &amp; Scun)
Lestor, Miss Joan (Eton &amp; Slough)
Rowlands, Ted


English, Michael
Lever, Rt Hon Harold
Sandelson, Neville


Ennals, David
Lewis, Ron (Carlisle)
Sedgemore, Brian


Evans, Fred (Caerphilly)
Lipton, Marcus
Selby, Harry


Evans, Ioan (Aberdare)
Litterick, Tom
Shaw, Arnold (Ilford South)


Ewing, Harry (Stirling)
Luard, Evan
Sheldon, Robert (Ashton-u-Lyne)


Faulds, Andrew
Lyon, Alexander (York)
Shore, Rt Hon Peter


Fernyhough, Rt Hon E.
Lyons, Edward (Bradford W)
Short, Rt Hon E. (Newcastle C)


Fitch, Alan (Wigan)
Mabon, Dr J. Dickson
Short, Mrs Renée (Wolv NE)


Fitt, Gerard (Belfast W)
McCartney, Hugh
Silkin, Rt Hon John (Deptford)


Flannery, Martin
McElhone, Frank
Silkin, Rt Hon S. C. (Dulwich)


Fletcher, Raymond (Ilkeston)
McGuire, Michael (Ince)
Sillars, James


Fletcher, Ted (Darlington)
Mackenzie, Gregor
Silverman, Julius


Foot, Rt Hon Michael
Mackintosh, John P.
Skinner, Dennis


Ford, Ben
Maclennan, Robert
Small, William


Forrester, John
McMillan, Tom (Glasgow C)
Spearing, Nigel


Fowler, Gerald (The Wrekin)
McNamara, Kevin
Spriggs, Leslie


Freeson, Reginald
Madden, Max
Stallard, A. W.


Garrett, John (Norwich S)
Magee, Bryan
Stonehouse, Rt Hon John


Garrett, W. E. (Wallsend)
Mahon, Simon
Stott, Roger


George, Bruce
Mallalieu, J. P. W.
Strang, Gavin


Gilbert, Dr John
Marks, Kenneth
Strauss, Rt Hon G. R.


Ginsburg, David
Marquand, David
Summerskill, Hon Dr Shirley


Golding, John
Marshall, Dr Edmund (Goole)
Swain, Thomas


Gould, Bryan
Marshall, Jim (Leicester S)
Taylor, Mrs Ann (Bolton W)


Gourlay, Harry
Mason, Rt Hon Roy
Thomas, Jeffrey (Abertillery)


Graham, Ted
Maynard, Miss Joan
Thomas, Mike (Newcastle E)


Grant, George (Morpeth)
Mellish, Rt Hon Robert
Thomas, Ron (Bristol NW)


Grant, John (Islington C)
Mendelson, John
Thorne, Stan (Preston South)


Grocott, Bruce
Mikardo, Ian
Tierney, Sydney


Hamilton, James (Bothwell)
Millan, Bruce
Tinn, James


Hardy, Peter
Miller, Dr M. S. (E Kilbride)
Tomilnson, John


Harper, Joseph
Miller, Mrs Millie (Ilford N)
Tomney, Frank


Harrison, Walter (Wakefield)
Molloy, William
Torney, Tom


Hart, Rt Hon Judith
Moonman, Eric
Tuck, Raphael


Hattersley, Rt Hon Roy
Morris, Alfred (Wythenshawe)
Urwin, T. W.


Hatton, Frank
Morris, Charles R. (Openshaw)
Varley, Rt Hon Eric G.


Hayman, Mrs Helene
Morris, Rt Hon J. (Aberavon)
Wainwright, Edwin (Dearne V)


Healey, Rt Hon Denis
Moyle, Roland
Walden, Brian (B'ham, L'dyw'd)


Heffer, Eric S.
Mulley, Rt Hon Frederick
Walker, Harold (Doncaster)


Hooley, Frank
Murray, Rt Hon Ronald King
Walker, Terry (Kingswood)


Horam, John
Newens, Stanley
Ward, Michael


Howell, Denis (B'ham, Sm H)
Noble, Mike
Watkins, David


Hoyle, Doug (Nelson)
Oakes, Gordon
Watkinson, John


Huckfield, Les
Ogden, Eric
Weetch, Ken


Hughes, Rt Hon C. (Anglesey)
O'Halloran, Michael
White, Frank R. (Bury)


Hughes, Robert (Aberdeen N)
O'Malley, Rt Hon Brian
White, James (Pollok)


Hughes, Roy (Newport)
Orbach, Maurice
Whitehead, Phillip


Hunter, Adam
Orme, Rt Hon Stanley
Whitlock, William


Irvine, Rt Hon Sir A. (Edge Hill)
Ovenden, John
Willey, Rt Hon Frederick


Irving, Rt Hon S. (Dartford)
Owen, Dr David
Williams, Alan (Swansea W)


Jackson, Colin (Brighouse)
Padley, Walter
Williams, Alan Lee (Hornch'ch)


Jackson, Miss Margaret (Lincoln)
Palmer, Arthur
Williams, Rt Hon Shirley (Hertford)


Janner, Greville
Park, George
Williams, W. T. (Warrington)


Jay, Rt Hon Douglas
Parker, John
Wilson, Alexander (Hamilton)


Jeger, Mrs Lena
Parry, Robert
Wilson, Rt Hon H. (Huyton)


Jenkins, Hugh (Putney)
Pavitt, Laurie
Wilson, William (Coventry SE)


Jenkins, Rt Hon Roy (Stechford)
Peart, Rt Hon Fred
Wise, Mrs Audrey


John, Brynmor
Pendry, Tom
Woodall, Alec


Johnson, James (Hull West)
Perry, Ernest
Woof, Robert


Johnson, Walter (Derby S)
Phipps, Dr Colin
Wrigglesworth, Ian


Jones, Alec (Rhondda)
Prentice, Rt Hon Reg
Young, David (Bolton E)


Jones, Barry (East Flint)
Price, C. (Lewisham W)



Jones, Dan (Burnley)
Price, William (Rugby)
TELLERS FOR THE NOES:


Judd, Frank
Radice, Giles
Mr. Peter Snape and


Kaufman, Gerald
Richardson, Miss Jo
Mr. David Stoddart.


Kelley, Richard
Roberts, Albert (Normanton)



Kerr, Russell
Roberts, Gwilym (Cannock)

Question accordingly negatived.

CHRYSLER UK LIMITED (FINANCIAL ASSISTANCE)

10.15 p.m.

The Secretary of State for Industry (Mr. Eric G. Varley): I beg to move,
That this House authorises the Secretary of State to pay or undertake to pay by way of financial assistance under section 8 of the Industry Act 1972 in respect of the business carried on by Chrysler United Kingdom Limited, or any of its subsidiaries, sums exceeding £5 million but not exceeding 162·5 million.

Mr. Speaker: I have to inform the House that I have not selected the amendment.

Mr. Michael English: On a point of order, Mr. Speaker. I am not allowed to ask you why you did not select my amendment, but if perchance the reason was that selecting it would have killed the debate stone dead, are you aware that that would be in accordance with the will of many hon. Members?

Mr. Speaker: Because of the noise in the Chamber I am not sure that I heard clearly what the hon. Member said. However, I shall seek to enlighten him in any ignorance from which he may be suffering. Under Section 8 of the Industry Act 1972, which governs the content of the motion, there is no provision for the imposition of conditions by the House in authorising such grants. In those circumstances, stated on page 569 of "Erskine May", the amendment, being outside the provisions of the present statute, may not be moved.

Mr. Varley: Yesterday I reported to the House the Government's proposals for Chrysler UK Limited and I said that they would be subject to detailed debate. This evening I am seeking the assent of the House to this motion so that these proposals may be implemented with all possible speed. The House knows that the potential total commitment that the Government face over the next four years is £162–5 million, and that this will cover losses—

Mr. Speaker: Order. Too many hon. Members are carrying on conversations in the Chamber. I must ask them to take their conversations outside.

Mr. Varley: The commitment will cover possible losses of up to £72·5 million, a model development programme of

£55 million, and guarantees for borrowings by Chrysler UK Limited of £35 million. That is the maximum commitment up to and including 1979. In addition to the Government providing guarantees, the Chrysler Corporation is also making guarantees to the Government for a substantial part of these potential commitments. The £35 million borrowing from the clearing banks will be guaranteed by the Government, but the Government, in turn, will receive a counter-guarantee from the Chrysler Corporation.
Furthermore, the Chrysler Corporation will guarantee unconditionally £28 million of the £55 million loan to be made available for the development programme, making a total guaranteed sum of £63 million. The remaining £27 million of the £55 million loan—

Mr. Speaker: Order. I made a request to the hon. Members about their private conversations. It now seems that I may have to give an order. This disturbance must stop.

Mr. Varley: The remaining £27 million of the £55 million loan will be secured by a charge over the assets of Chrysler UK Limited and its subsidiaries. Drawings under this part of the £55 million facility will be made at any time before 31st December 1979, but only after the £28 million guarantee by the Chrysler Corporation has been fully utilised. Although the total potential commitment is £162–5 million, the House will see that the Government's financial risk, save in exceptional circumstances, is substantially lower than that.
The Chrysler Corporation will also be making a substantial financial contribution to Chrysler UK's activities over the next four years. The Corporation has agreed either to capitalise or to waive repayment of the £19–5 million already borrowed by Chrysler UK from the parent Corporation, and the Corporation will, in addition, be prepared to subscribe cash for new equity in 1976 up to a maximum of £10 million to meet 50 per cent. of the losses by Chrysler UK in excess of £40 million. In later years the Corporation will meet 50 per cent. of losses by way of further new equity or maximum contributions of £10 million, £7·5 million and £5 million in 1977, 1978 and 1979, respectively.
As I reported yesterday, the Chrysler Corporation will extend up to £12 million on the introduction of the C6 at Ryton. Altogether, therefore, the Chrysler Corporation faces total financial commitments, including the counter-guarantees to the Government, of £106 million. That excludes the £19·5 million that will be capitalised or waived.
Briefly, therefore, the Government stand willing, subject to the authority of the House, to enter into a total financial commitment of £162·5 million, which will have the benefit of counter-guarantees from the Chrysler Corporation amounting to £63 million, and the Chrysler Corporation is willing to undertake commitments of £106 million.
I turn to the form of the Government's participation, which I know has exercised many of my hon. Friends, some of whom have tabled an amendment about securing equity stock in the United Kingdom subsidiary. The Government's attitude towards equity participation has been determined by the needs of the Chrysler UK Company. It would have been relatively easy to acquire the whole of Chrysler UK at very little cost, although with substantial liabilities. In isolation, the United Kingdom company, wholly owned as it could have been, could have had no prospects of success. It would have been too small, and the scope too limited. For reorganisation and revitalisation of Chrysler UK to succeed the company must have access to the wider technical, marketing, managerial and development base that only a large manufacturer can provide. In the mass car market scale is of the essence, and without it the necessary economies and competitiveness cannot be achieved.
My hon. Friends may ask why we did not take a lesser stake. In so far as that would have been practicable, the stake would have had to amount to control of the United Kingdom operation or would have placed restraints on the effective involvement of the Chrysler Corporation in the whole range of Chrysler UK's activities. Such participation would have been irrelevant to a soundly-based solution.
I draw to the House's attention the declaration of intent made by the Chrysler Corporation in this respect. Chrysler UK will be treated in all respects

on a par with other Chrysler subsidiaries throughout the world. It will have an expanding role in the Chrysler Group, its model range will be planned as an integral part of the Chrysler overall world plans, and new models will be introduced in both the car and the commercial sectors.
I certainly understand the concern of my hon. Friends for accountability when Government funds on this scale are involved. Such accountability is essential, and I hope to explain that we have had some assurances on this matter. Arrangements have been made to provide necessary controls through the right to appoint directors to the board of Chrysler UK. This will also be increased by employee participation in the company—another and no less important form of accountability.
We shall enter into a planning agreement with Chrysler Corporation and the loan arrangements that we shall conclude with both the Corporation and Chrysler UK will provide for the latter to make available management and financial information to the Government. There are a number of procedures by which the Government will be able to monitor the company and to express legitimate interest in its future.
I have briefly covered a number of issues, and I am sure that many comments will be made and questions asked tonight. If they require an answer from me, and if the House agrees, I shall seek to intervene at the end of the debate to reply to them.

10.26 p.m.

Mr. Michael Heseltine: We have had sufficient debates of this kind recently to understand how profoundly unsatisfactory a method it is of dealing with large sums of money. We shall spend £2 million a minute over the one and a half hours that we have for this debate—[Interruption.] The sedentary interruptions of the Minister of State, Scottish Office—the right hon. Member for Glasgow, Craigton (Mr. Millan)—have now cost £1 million.
I have tried since yesterday to understand the implications, for Chrysler UK, of the deal announced by the Government. I can lay no claim to the research facilities of a Government Department, nor can I be sure that the figures that


I have put together are totally accurate, but to give the Secretary of State the opportunity to explain why they are not accurate, I had delivered to him this afternoon my projected cash flow. It reveals a substantial deficit in the accounts of Chrysler UK over the next four years. Unless the right hon. Gentleman can explain where the money will come from, or where my calculations are deficient—I am prepared to accept that they may be—to go into the Lobby tonight behind the Order would be an act of irresponsibility.
Perhaps I can take the commitments which we know from the Secretary of State—[Interruption.] Since many of the constituents of the Minister of State, Department of the Environment—the right hon. Member for Birmingham, Small Heath (Mr. Howell)—are losing their jobs under this deal, perhaps he will listen to what I have to say. The commitments into which the Secretary of State intends to enter involve a capital programme of £218 million, built up in the following ways: first, there is to be the tooling up for the Alpine assembly at Ryton, which we know will cost £10 million ; there is the major facelift for the Avenger, which I believe will cost another £15 million ; there are to be three new models introduced in 1977, 1978 and 1979, two of them of cars. Paragraph 39 of the first chapter of the CPRS Report estimates that a new model costs £50 million to introduce, on the most restricted basis. One of these three will be a van/truck, and that may cost £50 million, but it is possible that that is an excess figure.
We must then allow for the annual modernisation programme that any company has to continue simply to replace machinery that wears out. I have allowed £5 million for that. In addition, after 1976 we are to have an increase in the United Kingdom content in the Alpine, from 50 per cent. to 100 per cent., which the right hon. Gentleman has said will cost £23 million.
The right hon. Gentleman has had plenty of notice of those figures. They are either right or wrong, and I should like to know which are wrong. They add up to £218 million over the next four years.
Perhaps I can tell the House the other assumption that I have made. I have assumed that the total losses over the four years amount to the figure that the Government have announced they are prepared to share, in some measure or other, with the Chrysler Corporation. In other words, there are losses of £105 million over the four years. It is no use right hon. Gentlemen shaking their heads. The £105 million is their figure. It is the figure in the statement made by the Secretary of State for Industry yesterday.

The Chancellor of the Duchy of Lancaster (Mr. Harold Lever): No.

Mr. Heseltine: I think that we should understand quite clearly what it is. The first arrangement is for £40 million next year, which is for the Government account. If any right hon. Gentleman wants to question that, he may do so. That is the Government's figure. They then agreed to accept 50 per cent. sharing, up to an additional £65 million, with the Chrysler Corporation. The right hon. Gentleman is shaking his head.

Mr. Lever: It is £60 million.

Mr. Heseltine: I believe that the statement says £65 million, but let us assume that it is £60 million. I think it is £65 million, because it is £32·5 million each. However, it is £40 million in the first year and £32–5 million each—

Mr. Lever: Yes.

Mr. Heseltine: I am so glad that the right hon. Gentleman agrees.

Mr. Lever: That refers to the first year.

Mr. Heseltine: I said £40 million in the first year, which is not the £30 million. It is £40 million in the first year. I am so glad that the right hon. Gentleman agrees with the figure. It is £40 million in the first year and £65 million in the following three years, divided fifty-fifty between the two. In other words, as I said three minutes ago—I do not know why I need to explain it to those who negotiated the deal—[Interruption.] If I am wrong I shall give way to the right hon. Gentleman.

Mr. Lever: It is only a minor point, but it is £65 million extra in the four years, including the first year.

Mr. Heseltine: It is not including the first year.

Mr. Lever: It is £40 million and £65 million for the four years.

Mr. Heseltine: That is correct. That is £105 million, by anyone's standards. That is all I am saying. Therefore, the losses are budgeted—we now have total agreement—up to £105 million. [Interruption.] I am getting more concerned every second as I listen to hon. Gentlemen. I do not think there is any point in the House waiting for the Secretary of State to reply. What is the total budget loss over four years in absolute total figures, as envisaged in the statement that the right hon. Gentleman made yesterday? Is it £105 million, or is it £40 million? It is a very simple question. What is the figure? Is it £105 million, £65 million or £40 million over four years?
This is an example of the reason why this House is increasingly held in ridicule. I am only trying to find out one figure, which all hon. Members opposite must know. Why will the Government not tell the House. If they would only do that it would be possible for me to move on to the rest of my speech. I should not need to press this point.
I want to help the Secretary of State. I shall now read from the right hon. Gentleman's statement. He said:
For next year it forecast a loss of £40 million".

Mr. Tom King: Right hon. Gentlemen should write this down.

Mr. Heseltine: For next year—one year—£40 million. Perhaps right hon. Gentlemen will make a note of that point.
We have offered to meet this"—
that means that the Government are going to pay—
in addition to meeting half of additional losses, if any, up to limits of a further £20 million next year, £20 million in 1977, £15 million in 1978 and £10 million in 1979."—[Official Report, 16th December 1975; Vol. 902, c. 1166–67.]
Does that add up to £105 million, or does it not?
I hope that Labour Members below the Gangway will vote for the sort of answers that we are getting tonight! I hope that for not even a single percentage point of equity they are prepared to support this

sort of total inability to answer the most fundamental questions on the deal. [Interruption.] I do not want the deal.
Perhaps I may revert to the aggregate totals. We have a capital programme of £218 million. We have assumed that we have losses of £105 million, and we have a reduction of overdrafts from creditors of £35 million. This is a total bill of £358 million. Where is it coming from? If I may refresh the Secretary of State's memory, we have his statement to tell us where it is coming from.
It will come first from the Government's contribution to losses of £72·5 million in total. It will come next in Government loans to finance capital expenditure of £55 million, in addition to the £72·5 million. I am assuming that the depreciation from the Chrysler UK cash internally generated will be the same as it has been over the past four years, that is, £5 million a year, giving an additional £20 million. We know that the parent United States company is committed to producing £33 million for the development of Ryton, and we know, further, that the Government are going to underwrite a clearing bank loan of £35 million. That adds up to £215 million—but we need £358 million. I should like to know where it is coming from.
I can understand the argument that £32·5 million is to come from the Chrysler Corporation if there are losses in excess of £40 million, so the deficit is not £142 million but £110 million. That is the deficit on the cash flow in the next four years.
I do not claim that those figures are right; I merely believe that we are entitled to a detailed explanation showing where they are wrong, before any hon. Member goes into the Lobby tonight, because if I am right, or even partially right, we shall be back here to vote for more money within the next two years.
It may help right hon. and hon. Members on the Government side of the House to understand that those figures, which show a deficiency of over £100 million, assume a number of factors that might stretch credulity rather far. First, no cost was included for moving the Avenger to Linwood. There is just a wave of a wand, and it will be done without charge. Secondly, there is no charge for increased working capital as this company expands. But perhaps most serious of all, the figures


are based on the assumption that the annual rate of inflation in each of the next four years is zero. That is the assumption about inflation—no inflation at all. We are still £100 million short.
I gave the Secretary of State notice of this matter because I thought that it would be right to let him have the opportunity to give me the figures in advance, at the Dispatch Box. I thought that the right hon. Gentleman might try to reply to what I thought was a helpful way of briefing him. I do not know how often Ministers at the Dispatch Box have sent their opposite number details of what they intended to say four hours before saying it, so that full replies could be given.
What is apparent is that the Secretary of State will not answer my questions. He will try to bluster his way through in the last 10 minutes of the debate. I hope that Labour Members who are thinking of voting for the motion will listen carefully to his explanation of the way in which that deficiency will be made up, or where any calculations are wrong.

Mr. Dennis Skinner: I shall tell the hon. Gentleman where the money, or some of it, is coming from. Some will come from payments of millions of pounds that would otherwise be made in social security benefits, earnings-related benefits and redundancy payments. Perhaps the hon. Gentleman will understand that many of us on the Labour Benches who have witnessed the return of the Crown Agents' £400 million that has been lost to property speculators are prepared to ensure that those who would otherwise be thrown on to the ever-lengthening dole queues will be rescued from them for as many years as possible.

Mr. Heseltine: I find the hon. Gentleman's intervention curiously helpful, as always. In saying where the money will come from, he admits that it will be needed, which is all that I am saying—that an extra £100 million will be needed. Perhaps the hon. Gentleman and his colleagues have a semantic explanation to give to the 14 million people out of work, showing why between 10,000 and 12,000 people should be in a privileged position while they are not. I shall be interested to hear it.
The hon. Gentleman should understand that we are not talking about curing unemployment,

or about protecting people's jobs ; we are talking only about which jobs we shall protect. It is a question only whether it should be the Chrysler jobs or the jobs of the 35,000 people made redundant every month. It will be necessary to explain to railway workers, steel workers and others losing their jobs all over the country that they are expected to tighten their belts, to give a year for Britain, while the Chrysler workers are not. There may well be arguments for that—

Mrs. Audrey Wise: Will the hon. Gentleman join some of us on the Government side of the House in opposing all those cuts and redundancies? Will he explain what benefit it is to the 1 million unemployed to have other people added to their numbers?

Mr. Heseltine: It is my wish to go further than the hon. Lady has in mind. I shall certainly take her place on the Government Benches, and she will take my place as quickly as possible.
Yesterday we debated the broad sweep of the Chrysler deal. I cannot remember—I doubt whether any other hon. Member can—a reaction across the nation so complete in condemning what the Government have done. Every national newspaper this morning—

The Minister of State, Department of Industry (Mr. Gerald Kaufman): The Daily Telegraph, the Daily Mail, the Daily Express.

Mr. Heseltine: Perhaps I can help the Minister of State by quoting some of the newspapers that normally support his party. It so happens that, by a curious coincidence, I have with me the Sun. [Interruption] I am happy to choose the Daily Mirror if it helps—[Interruption.]

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The Chair is having great difficulty in hearing the hon. Gentleman's speech. The Chair appeals for order.

Mr. Heseltine: I was saying that I have no objection to taking the lead story in the Daily Mirror, which says that
The bill for every job at Chrysler is £20 a week. Chrysler workers could well be subsidised by more than £20 a week under the Government's rescue plan.


Or one could quote from The Guardian, which referred to the company as
The lamest duck on the pond.
Or one could quote Welsh newspapers or Scottish newspapers in the same vein, because the story was exactly the same wherever one looked throughout the entire nation. The national Press, without exception, has condemned what this Government have done.
When the CPRS, the Select Committee and every newspaper have indicated that the Government have now abandoned the one strategy which, a month ago, it was claimed was likely to bring the country back to a state of prosperity, there should at least be the possibility that the House should understand that the nation believes that we are totally out of touch with what they are longing to see and hear from the present Government.
The reality is that our people are longing to be told how to solve our problems, and in what way the Government intend to lead the nation out of those difficulties. Until the Government are prepared to follow consistently one policy for one month at a time, there is no way that we shall combat the problems that undermine the strength of our economy. Everybody knows that, except a small group on the Labour Back Benches which totally refuses to allow the Government to uphold the action they should be taking.
If Labour Members believe that a solution to our problems is to be found by spending what Ministers say will be a figure of £162 million and what by other calculations could be nearly double that figure in trying to save 12,000 jobs in a company whose products are not wanted and a company that is going downhill, I fail to understand what is meant by the Government's phrase "industrial strategy".
Surely here was an opportunity for the Government to pursue a policy that would have commanded the widest conceivable consensus. They have missed that opportunity, and have done so for the narrowest form of mean party advantage in Scotland. They will pay the price for it. That I do not mind. What concerns me is that the price will be paid by the increased unemployment and inflation

which those policies are unquestionably causing every day.
It was characteristic of the Prime Minister to say that Mr. Riccardo had put a pistol to his head. What a gross exaggeration of the situation that was. Why should he conceivably undertake the risks associated with manslaughter when he can get away with daylight robbery scotfree?
The reality is, as we know beyond doubt, that when the Prime Minister is faced with an intractable position he seeks without any question the lowest common denominator and clings to it like a drowning man clinging to a raft. Until the right hon. Gentleman is prepared to bring a sense of national leadership to our problems there will be no solution to these problems, or to our national industrial demands.

10.51 p.m.

Mr. Eric Moonman: There is certainly one problem that is of the Government's making tonight, and that is the fact that we are discussing this complex issue in a certain amount of confusion. That is a massive understatement. It would have been more sensible if this important issue had been deferred until after the Christmas Recess.
There are three points that I wish to raise. The first relates to the extraordinary document known as the declaration of intent. I am sure that the Secretary of State has given more information than was contained in the document, but he will not be surprised if many of us feel distressed about having to make do with six brief paragraphs which are generalised statements, prepared, as far as I can gather, by the company although they commit the Government.
My right hon. Friend said that this operation will permit the company to go for the mass car market. What is clear to anyone who understands the motor car industry is that the profit sector is not in the assembly but in the initial production. Assembly has certainly been a problem in many companies and one which is recognised in the Ford Motor Company in my constituency. Paragraph 4 of the declaration of intent is particularly relevant. In this paragraph, in only one case out of the five references by the company is there any reference


to "production." This is to do with the improved Avenger:
to be produced late next summer.
In the other cases we are talking about "assembly" and "introduction," whatever that means.
Since no one can take the trust and good will of the Chrysler company too seriously the thought must be in all our minds that this could turn out to be an assembly operation and the people in this country could end up merely assembling cars.
Turning to the strategy mentioned by the Secretary of State, I am led to wonder why we did not take over the company. One of the implications in the fact that we did not is that we did not have faith in British management. If there had been an opportunity to take over the company, perhaps on a joint basis with the Iranians, the move would have made good sense.
My third point deals with the credibility of Mr. Riccardo and the binding nature of this arrangement upon the American board. The evidence is that this company does not have a successful track record in the United States and world-wide. The Government's policy lays much trust on the way in which this company will function world-wide in the next five years.
It would have been more acceptable to me and my colleagues if, in any of the Government statements—and there have been several in the past 24 hours—there had been some reference recognising the way the company had behaved and showing that consideration was being given to formulating guidelines for the operation of multinational companies in this country. It is clear that Chrysler—whether or not it had a pistol at the head of the Prime Minister—has managed to come into this country, has given us little option, and has said that it is prepared to move out.
I hope that during the debate some reference will be made to the way in which we want to encourage companies from the United States or anywhere else to come into this country and take up the responsibilities essential in dealings between Government and industry. While there has obviously been tremendous financial flair in the way this

deal has been put together, what is clear is that there has been a lack of management assessment.
That is a most difficult matter for any of us to accept. The proposal lacks a management understanding of how the proposal will fit together. That point must be dealt with before we conclude the debate. We must know that management understand the position of the Corporation's establishments in this country vis-à-vis those overseas under the proposals. If the Government do not get that right, Chrysler UK will be merely an assembly shop for the rest of the Chrysler organisation.

10.56 p.m.

Mr. Nigel Lawson: I am happy to speak after the thoughtful contribution by the hon. Member for Basildon (Mr. Moonman), not least because he has many Ford workers in his constituency, while my constituency reaches to within a dozen miles of the Ryton plant, and I have many Chrysler workers as constituents. I make that point not because I wish to make a constituency speech: I believe that this issue is far too important for that. The national interest is at stake. I mention my constituency interest, however, to make clear that not every hon. Member with Chrysler workers as constituents wants to get his hands into the pork barrel in the short-term interests of those constituents, while disregarding the immense long-term detriment that the proposals will cause.
This motion has nothing really to do with unemployment. The real reason for the motion is to enable the Government to pay Scotgeld. That will prove as futile a policy as paying Danegeld. I reckon that with 41 Labour Members from Scotland, and the £162·5 million in this motion, it is costing about £4 million per Member in a vain attempt to save their seats. They are expensive fellows, and I am sorry that more of them are not here to show their gratitude at what is being done for them. We have heard that Mr. Riccardo put a pistol to the Government's head. Alas, that is not true. What happened was that the Government put their head to Mr. Riccardo's pistol.
This whole scheme is unnecessary, as was proved by the arguments advanced by the Secretary of State for Industry,


both tonight and yesterday. He says that it will save jobs, although the figures vary. Sometimes it seems that 17,000 jobs will be saved—the 1number left at Chrysler after the 8,000 redundancies—and sometimes the number is alleged to be 40,000. He has also said, however, that the industry as a whole will run down anyway, and by more than that number. At the very most, therefore, he will save jobs in Chrysler temporarily, but those jobs will be lost elsewhere in the motor industry. The right hon. Gentleman tells us that he wants a slimming-down operation, not the amputation of one limb. That is nonsense, but there is further nonsense, because there are many opportunities for jobs at this time—

Mr. Les Huckfield: Rubbish!

Mr. Lawson: The hon. Member does not read his local newspaper. If he did he would see the job vacancies.

Mr. Les Huckfield: Like myself, the hon. Member for Blaby (Mr. Lawson) has a large number of constituents who work in the Coventry area. Redundancies are pending at British Leyland, at GEC, at Alfred Herbert and at several other concerns—

Mr. Peter Rost (Derbyshire, South-East): All under Labour.

Mr. Les Huckfield: They have not arisen only under a Labour Government. They started under the Conservatives. Where does the hon. Member for Blaby think his constituents will find other jobs?

Mr. Lawson: First, the hon. Gentleman should look at the job vacancies listed in the local newspaper in his constituency. I do not seek to deny the hardship that is caused by unemployment, but there are jobs available all the time. Second, if the hon. Gentleman studies the figures produced by the Department of Employment he will realise that even in these depressed times about 300,000 people leave the unemployed register and go into employment each month. That is a fact based on the official figures published by the Department of Employment. It is right that we should put these matters into perspective.

Mr. Les Huckfield: Absolute rubbish.

Mr. Lawson: The next matter that must be borne in mind is the nature of the jobs that are to be kept. The Chrysler workers will be constantly looking over their shoulders and wondering when the next crisis will take place. They will be worried because they will have no security. They will be wondering whether they will be able to pay the next mortgage instalment. Within a year, the 8,000 workers who are now to be laid off will be the lucky ones. They will be envied by the 17,000 who remain. The 8,000 will find jobs elsewhere, while the 17,000 will remain in insecure employment at Chrysler.
Stress has been placed on the unemployment pay saved as a result of the Chrysler deal. This point has been taken up by the hon. Member for Bolsover (Mr. Skinner), the Secretary of State for Industry and the Secretary of State for Employment. They say that the Government have made a good deal because, if Chrysler were not saved, unemployment pay would amount to £100 million a year, or more. That is also complete nonsense. First, one-third of the work force is in any case to be declared redundant, so we need consider only the remaining two-thirds. Moreover, the truck division, which employs 3,000 people, is perfectly viable. If a receiver were brought in he would be only too happy for it to be sold to Volvo or Vauxhall, for example. That division would remain in business.

Mr. Brian Sedgemore: Will the hon. Gentleman take it from me that when I asked the managing director of Vauxhall whether his company was interested in buying the concern he said that it was not, although it might buy the land. He said that Vauxhall was not interested in the Chrysler operation.

Mr. Lawson: I do not believe that the managing director of Vauxhall would reveal his strategy to the hon. Gentleman.
We have to consider the amount of unemployment pay that would be paid to two-thirds of the work force. Are the Government saying that they will run the economy so that everyone who goes on to the unemployment register will remain unemployed for a year? If so, that is a terrible deterioration. The average time spent on the unemployment


register at present is less than six months but the Government are basing their calculations on an average of 12 months. That is an interesting piece of information. If we base our calculations on an average duration of unemployment of six months for two-thirds of the work force we arrive at about £30 million at most, instead of £100 million. That has to be measured against £162½ million.
The Iranian order has also been used by the Government. We know that it is profitable, so arrangements could have been made to cover it in any event. We know from the CPRS that it is a wasting asset. But the most important lesson to be learned from this argument is that if a company is on the verge of insolvency it must approach a foreign country, preferably an Arab country or at least an oil producer, and obtain a huge order from its Government. If that is done the present Government, come what may, will mount a rescue operation. All that any large industrial organisation in difficulties has to do is to obtain an Iranian or Saudi Arabian order. If it does that it has no need to worry, as the British taxpayers, through the Government, will be forced to pay the bill.

Mr. Peter Viggers: Perhaps my hon. Friend will ask the Governmen: exactly what contact they have had with the Iranian purchasers of CKD parts, and whether they have direct contact with the Khayami family, who are basically responsible for the purchase of those parts, or have relied on the word of the Chrysler organisation?

Mr. Lawson: I hope that the Secretary of State will answer those important questions.
But the real cost is not to be measured simply in these financial terms. As has been said—it needs to be said again—the real cost is that the Government's so-called new industrial strategy has been totally undermined.
When I read the White Paper called "Approach to an Industrial Strategy", I had not realised the significance of the word "approach". They approached, but then they drew back. But we are told in more homely terms than those of the White Paper what the new industrial strategy is. According to the Prime Minister,

… what we are looking at really is supporting, fortifying and strengthening the valiant and the brave for the future and also providing resuscitation for wounded heroes.
Where does Chrysler fit on this roll of honour? Again according to the Prime Minister,
… the situation we have been presented with is something which, I am sure, when all the facts are known, will turn out to be distasteful to hon. Members in all parts of the House."—[Official Report, 11th November 1975; Vol. 881, c. 1137.]
Let us hear these distasteful facts. The Prime Minister said that there was a history of Luddism on both sides of Chrysler, and that it was a lousy company. Let us hear from the Secretary of State why this lousy company, condemned in every way by the Prime Minister, is now a wounded hero.
The Chancellor of the Exchequer cannot remain unscathed in this affair, either. What has been undermined is not merely the Government's industrial strategy but their whole economic policy. I waited today to learn what compensating public expenditure cuts would be announced to make way for the £162·5 million, or even for the initial £72·5 million. We were told about not a penny of cuts.
The Government's decision on Chrysler has undermined the whole of their economic policy. It has undermined, too, all remaining confidence either at home or overseas that the Government are in earnest about curbing inflation. That is why there was such a catastrophic effect on the foreign exchange market yesterday as soon as the arrangement was announced.
It is up to this House now to retrieve the situation by refusing to pass this motion. This is a turning point in the brief history of the Government. It is like Upper Clyde Shipbuilders were in the history of the Conservative Government, and it will have the same adverse effects on this Government as that decision had on the previous Conservative Government.
This is the Government's last chance to be told by Parliament to learn sense, since they cannot learn it by themselves.

11.7 p.m.

Mr. Richard Wainwright: We on the Liberal Bench share fully the concern of the hon. Member for Basildon (Mr. Moonman) that this second part of the deal should be put through


the House tonight before there has been any time for reasonable analysis of the extremely complicated and, in my view, very mysterious figures that the Government gave us yesterday.
I return to the question that I asked the Secretary of State yesterday at the end of his statement. How does he reconcile the grandiloquent and very expensive declaration of intent from Chrysler with the figure that he has put into this motion? The hon. Member for Henley (Mr. Heseltine) gave his version of the substantial discrepancy that he found in that figure. According to the advice of the Bristol University Motor Industry Research Group, the discrepancy between the grandiloquence of Chrysler's intentions and the figure for which we are asked tonight is at least £110 million. Therefore, from two sources, working quite separately and admittedly on estimated figures, this substantial discrepancy is thrown up. That must be explained, if it can be.
But even if that is to be explained, we come to the second element of fraud in this figure, namely, that there is no provision for the inflation that will inevitably occur during the next three years. The House should realise that it cannot be more than 18 months before we are back here being asked, at someone's pistol point, to vote even more in order to save more redundancy payments, and the rest.
Finally, because I owe it to the House to be very brief, we come to the appalling position that will be reached if the company is still in existence by the end of 1979, when it will cease to be generating any profit cash and will go back to a substantial loss position. What a reward for all those taxpayers' money—to ruin the Government's industrial strategy and to bring the Chancellor's financial strategy into grave danger. What a reward, at the end of 1979, to be left with a company which is quite incapable of generating any of the capital or finding any capital from the market, which is necessary to make it viable by the early 1980s.
Even if the figure were £162½ million, we on the Liberal Bench would vote against the motion, but since, in our view, during the next five years it will be infinitely more than £162½ million, we regret that the Government have not come clear about it.

11.11 p.m.

Mr. John Lee: Although political memories tend to be short, the hon. Member for Blaby (Mr. Lawson) will have cause to regret the light-hearted way in which he seemed to treat the problem of unemployment. Although many of us on the Government side of the House have misgivings about many aspects of this deal, none of us would feel other than a sense of disgust at the light-hearted and almost frivolous way in which the hon. Gentleman and some other hon. Members seem to regard this whole Chrysler affair.
Having said that, it is only right that I should say that there is an element of desperation about certain aspects of the situation. I must say that I voted for the Government last night with considerable reluctance, and I shall be voting with considerable reluctance again tonight. As one who has helped lower the Government's majority to the lowest that it has been so far in this Parliament, nobody can accuse me of lacking in ability to abstain or to vote against my own party. I have done so on previous occasions and I have no doubt that I shall do so again.
I want to ask one or two questions to which hon. Members below the Gangway have a right to know the answers. It is bad enough that there is no buying in of an equity share in this company. This situation is fraught with uncertainty. There is no certainty that the operation will succeed. We hope it will, but there are many aspects about it which are disturbing. The prognosis upon which the rescue operation was based is somewhat optimistic, in many respects. When one has to set that against this situation, in which, inevitably, to a considerable extent the rescue operation will be in competition with British Leyland and must make the Leyland operation that much more difficult to achieve than would otherwise be the case, one cannot be too optimistic about the outcome.

Mr. Douglas Hurd: The hon. Gentleman, like myself, represents many workers in British Leyland. Has he considered the fact that this operation will substantially undermine the much greater operation involving British Leyland in terms of investment and jobs? We have had no information on that subject. How can it be possible for Lord Ryder to tell British Leyland that


it will get no more public money without an improvement in industrial relations, while large sums of public money are proposed to be made available to Chrysler—

Mr. Deputy Speaker: Order. The hon. Gentleman must not make a speech. He may only make an interjection.

Mr. Lee: The hon. Gentleman will have to make up his own mind whether he wants to make an intervention or a speech when the time comes.
As I was saying, this is bound to make the Leyland operation that much more difficult. One does not need to say more than that. The Minister must realise that many of us on the Government side of the House share the hon. Gentleman's misgivings. It may be a matter of degree how seriously this will impinge on the other operation, but that it will impinge on it to some extent is inevitable.
The main purpose of my intervention is to ask my right hon. Friend what the two Government-appointed directors are to do. Will we find ourselves in a situation similar to that which arose with the Government-appointed directors on the board of BP? Those directors took no notice of the energy policy introduced by the then Prime Minister, the right hon. Member for Sidcup (Mr. Heath). They found themselves in a minority interest on a board that otherwise allowed itself to be governed by private commercial considerations.
Will these directors be genuine Government representatives? There are many Government-appointed directors scattered around various organisations, but their performance, to say the least, has not been distinguished by the extent to which they have made themselves accountable to the Government. In the absence of an equity holding in Chrysler the least we can expect from my right hon. Friend is a clear indication of what the directors are meant to do.
My hon. Friend the Member for Coventry, North-East (Mr. Park) put that question to the Secretary of State yesterday. The Secretary of State for Scotland—perhaps he had not time—did not reply to it. Therefore, I put the question again and ask my right hon. Friend to answer it.

Mr. Ian Mikardo: Does my hon. Friend realise that his question, whatever answer he may elicit, is not the important question in this debate? Irrespective of what these Government-appointed directors do—even if they do all the things that my hon. Friend would like them to do—the question of what Chrysler cars are made, and where, will be decided not by those directors, and not at 1 Victoria Street, but in Detroit.

Mr. Lee: My hon. Friend is right. But at least we should know what those directors are there to do. Are they to monitor the working of the operation? If the commercial decisions are to be taken in Detroit in any event, the least we can expect is that those directors shall monitor the way in which the company functions.
A disturbing feature of a number of British companies of considerable size and of multinationals has been that apparently prosperous organisations have suddenly plunged into insolvency within months, and everybody has been surprised. I think that we should have an indication that the Government-appointed directors will report back to the Secretary of State and that he, in turn, will be that much better informed of what is going on inside Chrysler.
The limitations of the Companies Act are extensive, but surely directors are basically responsible to the shareholders. At least let us be sure that the Government-appointed directors carry out some of the functions that would have been expected of them had the Government bought an equity share in the company as many of us wanted them to do.
I do not think that my hon. Friends below the Gangway have any great confidence that we shall get a satisfactory answer. The least for which we can hope is a clear answer, even if it turns out to be disappointing.

11.18 p.m.

Mr. John Stanley: I suggest that, whatever the financial defects of this deal, there are good parliamentary grounds alone for rejecting the motion.
The Government know that every time they wish to have more than £5 million


passed from public funds to Chrysler, they must, if they do it in individual tranches, seek the approval of the House in the way that they are seeking it tonight. Despite the fact that this entire deal hangs on nothing more substantial than a declaration of intent, the Government have lumped together all the known and contingent liabilities for next year, the year after that, the year after that, and the year after that, into one big bumper bundle of £162·5 million, to ensure that there can be no guaranteed parliamentary debate at any time over the next four years on how the deal has progressed and whether the House should approve any additional expenditure.
The House would be well advised to reject this motion on the ground that we are being deprived of any future opportunities to review the expenditure we are committing tonight. Once again, the Government are taking the maximum amount of public money with the minimum amount of parliamentary debate, and that should be resisted on all sides of the House.
The motion should also be rejected on financial grounds. The Secretary of State for Industry told us that Chrysler and the Government will have an equal share in the profits of Chrysler UK, though he omitted to say in which decade these profits would start to arrive. If there is to be equal sharing of the profits there ought to be equal sharing of the risks and, despite what was said by the Secretary of State for Employment in winding up the previous debate, nobody looking dispassionately at this deal could suggest that there is equality of risk-sharing between Chrysler and the Government.
Risks fall into two categories—the certain liabilities, the losses piling up year after year and the contingency risks represented by capital expenditure, which can be deferred if the company chooses. The real test is how the losses are to be shared. We know that Chrysler is forecasting a loss of £40 million for next year and the British taxpayers' liability is the entire £40 million. Chrysler's liability is precisely nil. Over the four years to the end of 1979, the taxpayers' share of the losses will be £72·5 million and Chrysler's share only £32·5 million. By any standard, the British taxpayers are taking the lion's share of the real risk in this deal while the Chrysler Corporation,

with the Government's agreement, is being shielded from the main risk.
We must also look at the difference in the degree of commitment of the two parties. The British Government and taxpayers are locked irrevocably into this deal for as long as Chrysler UK continues. They are locked into a maximum liability of up to £162·5 million. Chrysler, on the other hand, is merely bound by a declaration of intent, which has no contractual force. Chrysler can withdraw, modify or say that the declaration of intent can no longer be implemented fully. The Government and the taxpayers are firmly on the hook in this deal, and Chrysler is not on the hook at all. That is another good reason for rejecting this arrangement.
A significant amendment, which was not called for debate, was tabled by the hon. Member for Nottingham, West (Mr. English) and a number of other hon. Members opposite. It called for a share in the ownership of Chrysler as a condition of the provision of public money. I did not agree with it and would not have voted for it, but those hon. Members who have tabled it have at least been totally consistent in the case that they have been arguing for nationalisation, and their very consistency starkly exposes the total inconsistency of Government Ministers and the shallowness of the arguments that they have been advancing in a number of nationalisation debates.
Time after time, those of us on the Opposite side of the House have been attacked for not accepting the Government's argument—expressed in tones of righteous indignation—that where public money was spent on the private sector, nationalisation must follow. That argument was used in debates on British Leyland, Ferranti, Alfred Herbert, the National Enterprise Board and the nationalisation of the shipbuilding and aircraft industries. Yet tonight we are asked to vote £162½ million of public money and not one share is changing hands.
I agree that the Government are right in not accepting a single share in Chysler, because it would not be worth their while to do so. But no member of the Government has any longer the right to tell us that a certain company or industry should be nationalised because public money is going into it.


That argument is exploded and is shown to be totally fraudulent by this motion.

11.25 p.m.

Mr. Douglas Henderson: The debates and votes of yesterday and today are in many ways bogus. We have been asked to approve a total package that we agree with or disagree with in total. There has been no opportunity of raising the question whether certain aspects are acceptable or unacceptable. In many ways it is a pity that the amendment was not selected, because at least it would have allowed an expression of opinion on one part of the package. Instead, we are asked to vote either in favour of 8,000 redundancies or in favour of saving 17,000 jobs. That is a ridiculous question to put to the House of Commons.
We were told yesterday by the Secretary of State for Industry that redundancies will fall most heavily in the Midlands. When I questioned him about that, he did not answer me, but, according to the figures I have, 43 per cent. of the jobs in Scotland will be lost at Linwood, as compared with 30 per cent. in Chrysler as a whole. The Scottish people are entitled to an answer tonight.
I must declare an interest. I, in the elegant words of the hon. Member for Blaby (Mr. Lawson), am perhaps one of those responsible for this payment of "Scotgeld", as he called it. It is perhaps the first time in history that money is being paid by England to Scotland out of what is owned by Scotland. The future of the workers at Linwood could be secured by three days' oil revenues from Scottish oil. [Interruption.] That does not please hon. Members, but the people of Scotland understand it and the workers at Linwood do.
The hon. Member for Henley (Mr. Heseltine) goes on about what the Press says, but it is the English Press that he quotes. Did he read the Daily Record today? It does not say "So many thousand jobs saved". It says, "3,000 Linwood jobs lost". The Scotsman, in its editorial, describes the Chrysler deal as a black day for Strathclyde. Hon. Members will have to realise that people in Scotland see these things differently from the view from London.
We believe that there is a future for Linwood—a future in a Scottish context

within the concept of a Scottish motor corporation which will bring together the elements of the motor industry in Scotland. [Interruption.] Hon. Members are great at sneering and jibing at Scotland, but they do not sneer and jibe at Sweden with its successful motor corporation. There is no reason why we should not do the same thing in Scotland.
We want concrete answers tonight. What is the explanation of the cut-back in jobs? What new models are there in this declaration by Chrysler for 1977, 1978 and 1979? Can the Secretary of State give a categorical assurance that one of them will be allocated to Linwood? If he cannot, there is no guaranteed future for the workers at Linwood.

11.30 p.m.

Mr. Tom King: This is the second time in two days that we have debated a matter that is of great importance not merely to Chrysler employees but to the motor industry and our national economy. Yesterday, the hon. Member for Basildon (Mr. Moon-man) said that if we all make constituency speeches on this subject the nation has not a chance. He could not be more right. My hon. Friend the Member for Blaby (Mr. Lawson), who has many Chrysler workers in his constituency, recognised the damage that this operation will do to the whole industrial framework of the country.
When the Secretary of State winds up the debate I hope that he will do the House the courtesy of explaining the figures. Not many Ministers in his position have been shown the courtesy of being given four hours' notice by the Opposition spokesman of the figures that he would produce in the debate, with a request for clarification. The hon. Member for Colne Valley (Mr. Wainwright), working from an entirely different source, produced virtually identical figures.
The Government have entered into a commitment for £260 million and are asking the House tonight for only £160 million. Before this matter came forward for consideration there were leaks to the effect that the operation would actually cost the country £300 million, but that it would be dressed up to look like £150 million. There are ominous signs that those leaks were correct. I hope that the Secretary of State will tell us just


what are the figures. The declaration of intent will look extremely hollow unless we know where the money is to come from to implement the intentions. If those figures are right, the cost per job will have gone up to nearly £16,000.
Other elements are still unresolved. I understand that it is a requirement of Chrysler and of the Government that the money will not be available from either party unless there is full union agreement to new manning levels at Ryton and Linwood and achievement of the French Simca level of productivity. Did the Secretary of State receive those commitments from the unions at his meeting with them today? If he did not, what is the point of proceeding with the operation, as the other parties are not prepared to proceed without those commitments?
Will the Secretary of State tell us the truth about the Iranian situation, as requested by my hon. Friend the Member for Gosport (Mr. Viggers)? The Government tell us that 8,000 jobs will be lost and that if they had let the business go 55,000 jobs would have been lost. They do not mention any multiplier, or any added factor. How many jobs are lost from importing knock-down kits from France? Is the number additional to the 8,000? The Government have a duty to come clean and tell us the honest facts.
My hon. Friend the Member for Blaby referred to pistols at people's heads. The Secretary of State must have had a pistol at his head to get him here on two consecutive days, and I have some sympathy with him. Holding the office that he does, he has a duty to answer the debate and give the House and the nation the full facts. Members of the Labour Party seem to have had heavy-barrelled revolvers pointed at their heads to persuade them how to vote tonight. If the speech made by the hon. Member for Birmingham, Handsworth (Mr. Lee) was an illustration of the voice of a real rebel, it was the most pathetic attempt I have heard for a long time. He was told, with that acid quality we remembers from the days of the Industry Bill, by the hon. Member for Bethnal Green and Bow (Mr. Mikardo) what the Government-appointed directors would actually do for the future of Chrysler.
With the need for this debate the House has a last chance to answer the cry that echoed through the country yesterday, when the first news of this matter came, and when the Sun newspaper, for instance, said, in effect, "Is no one in the Government willing to face the truth?" Will the Government now tell us the truth and let us judge the facts? When the truth is known, I trust that the whole House will join in rejecting the Order.

11.35 p.m.

Mr. Varley: From what we have heard tonight, people would be forgiven for thinking that we are doing what we are doing under the modestly controversial Industry Act 1975 and not the Industry Act 1972. But of course we are doing it under the Act passed and actively supported by all the right hon. Members on the Opposition Front Bench. The hon. Member for Tonbridge and Mailing (Mr. Stanley) suggested that we had lumped everything together, that we are dealing now with the £162½ million contingent liability so that we need not come back to the House again.
My hon. Friend the Member for Basildon (Mr. Moonman) suggested that we might have considered the matter after Christmas. It was not possible to do either of those things under the Industry Act of the last Conservative Government. Under Section 8 (8), when the Government enter into a commitment and the Secretary of State pays or undertakes to give financial aid, the matter has to come before the House. There is no practicable way in which I could provide £20 million before Christmas and £142 million after Christmas—

Mr. Heseltine: Rubbish.

Mr. Varley: It is not rubbish at all, as the hon. Member would know if he had studied the Act.

Mr. Heseltine: The right hon. Gentleman must know that that is exactly what the Government did with British Leyland.

Mr. Varley: It is not what the Government did with British Leyland, because that was done under a different procedure. It was done under a special Act—

Mr. Tom King: Rubbish.

Mr. Varley: I do not know why the hon. Member shouts "Rubbish". He was not even in the Chamber when that


Act went through, so let us have no nonsense from him.
It has been suggested that the Government could have acted in a different way. It is true that we could have delayed signing this agreement with Chrysler, and escaped, if you like, until the recess. We could have said that we did not want to go through the parliamentary procedure. The Conservative Industry Act says that if money is urgently needed at a time when the Secretary of State is satisfied that it is "impracticable "to obtain the approval of the House of Commons,
… in that case the Secretary of State shall lay a statement concerning the financial assistance before each House of Parliament.
It would have been perfectly easy. It would have been a device, and it would have been disgraceful, but we could have delayed the decision to lay a statement, allowed the House to go safely into the recess, and then laid the statement—and there would have been no further parliamentary action. We are condemned for doing the honourable thing, in accordance with the Conservative Industry Act.
The hon. Member for Aberdeenshire, East (Mr. Henderson), who speaks for the Scottish National Party, asked for important information about that country. If I had time I would go through the actual redundancies, but I can tell him that 6,400 redundancies will arise in England as a result of this operation. In Scotland the level of employment in August 1976, when there is a pick-up of work following the transfer, will be 1,500. It is true that the immediate redundancies at Linwood will be 3,000, but when the Avenger work is transferred there will be a pick-up of work. I do not want to mislead the hon. Member's party: the level will go back to about 5,500.
The hon. Member for Aberdeenshire, East asked about models for Scotland, and mentioned the declaration of intent. The declaration of intent says that a new small conventional-drive car will be introduced in 1977. That will be produced in Scotland, as also will be the new light car to be introduced in 1979. I hope that that is the information that the hon. Gentleman required.
I turn to the point raised by the hon. Member for Henley (Mr. Heseltine) who, as he said, informed me about the points

that he wanted to raise in the debate. He has got the arithmetic completely wrong. He has used speculative figures, which are not related to the facts or to the information that we obtained from the Chrysler Corporation—information that has been agreed with the leading and respected international consultants, Coopers and Lybrand. The hon. Gentleman wrote to me claiming that there was a shortfall of £142·5 million between the requirements of Chrysler UK and the funds available. However, the hon. Gentleman has not taken into account the commitment of the Chrysler Corporation to contribute £32–5 million towards the losses.

Mr. Heseltine: That is in the letter.

Mr. Varley: The hon. Gentleman has overestimated the product development programme. He puts that at £175 million, when it is £65 million.

Mr. Norman Tebbit: Three new models.

Mr. Varley: The figures are £55 million for model development and £10 million for tooling up Ryton for the Alpine.

Mr. Heseltine: Is the Secretary of State for Industry seriously telling us that we shall get the tooling up of the Alpine, a major facelift for the Avenger and three new models for £65 million when the CPRS Report, in Chapter I, paragraph 39, says:
It costs around £50 million to bring out a new model, assuming that an existing engine can be used, and about £25 million to tool up for a major facelift"?

Mr. Varley: That does not alter the situation one iota. It is not usual for this Government or for any Government to be so forthcoming over the information they receive. I have already told the hon. Gentleman—I hope he accepts it—that Coopers and Lybrand looked at the figures and agreed them. I would also point out, if it is of any help to the hon. Gentleman, that the CPRS, which has been associated with this exercise throughout, agrees with the figures I have produced and those mentioned in the Order.
I go further. If the hon. Gentleman will submit his letter to me in the form of a Question, I shall arrange for it to be itemised in the Official Report so that


the whole House can join in this debate rather than the hon. Gentleman and myself.

Mr. Heseltine: rose—

Mr. Varley: There are many other questions that need to be answered, Mr. Deputy Speaker.
As a result of the proposals that we have put before the House, I hope that hon. Members will recognise that we have been fair and forthcoming. We could certainly have slipped this matter through during the recess if we had wanted to. That would have been tantamount to a parliamentary scandal. However, we have been open with the House on every occasion. The Conservative Party realises that every time we have been concerned about a situation we have attempted to save jobs in a realistic and practical way that ensures that there is an ongoing Chrysler UK commitment here.

My hon. Friends have asked why there could not be an equity stake. As I have already explained, it could have been a 100 per cent. British company, but we could not have got it properly knitted into the world-wide operations of Chrysler UK. There will come a time when the agreement will be signed, and I am certain that there will be demands by a Select Committee for that agreement to be laid before the House of Commons. I give the House the assurance now—

It being one and a half hours after the commencement of Proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).

The House divided: Ayes 287, Noes 266.

Division No. 20.]
AYES
[11.45 p.m.


Abse, Leo
Craigen, J. M. (Maryhill)
Golding, John


Allaun, Frank
Crawford, Douglas
Gould, Bryan


Anderson, Donald
Cronin, John
Gourlay, Harry


Archer, Peter
Crosland, Rt Hon Anthony
Graham, Ted


Armstrong, Ernest
Cryer, Bob
Grant, George (Morpeth)


Ashley, Jack
Cunningham, G. (Islington S)
Grant, John (Islington C)


Ashton, Joe
Cunningham, Dr J. (Whiteh)
Grocott, Bruce


Atkins, Ronald (Preston N)
Davidson, Arthur
Hardy, Peter


Atkinson, Norman
Davies, Bryan (Enfield N)
Harper, Joseph


Bagier, Gordon A. T.
Davies, Denzil (Llanelli)
Harrison, Walter (Wakefield)


Bain, Mrs Margaret
Davies, Ifor (Gower)
Hart, Rt Hon Judith


Barnett, Rt Hon Joel (Heywood)
Davis, Clinton (Hackney C)
Hattersley, Rt Hon Roy


Bates, Alf
Deakins, Eric
Hatton, Frank


Bean, R. E.
Dean, Joseph (Leeds West)
Hayman, Mrs Helene


Benn, Rt Hon Anthony Wedgwood
Delargy, Hugh
Healey, Rt Hon Denis


Bennett, Andrew (Stockport N)
Dell, Rt Hon Edmund
Heffer, Eric S.


Bidwell, Sydney
Dempsey, James
Henderson, Douglas


Bishop, E. S.
Doig, Peter
Hooley, Frank


Blenkinsop, Arthur
Dormand, J. D.
Horam, John


Boardman, H.
Douglas-Mann, Bruce
Howell, Denis (B'ham, Sm H)


Booth, Albert
Duffy, A. E. P.
Huckfield, Les


Bottomley, Rt Hon Arthur
Dunn, James A.
Hughes, Rt Hon C. (Anglesey)


Boyden, James (Bish Auck)
Dunnett, Jack
Hughes, Robert (Aberdeen N)


Bradley, Tom
Eadie, Alex
Hughes, Roy (Newport)


Bray, Dr Jeremy
Edge, Geoff
Hunter, Adam


Brown, Hugh D. (Provan)
Edwards, Robert (Wolv SE)
Irvine, Rt Hon Sir A. (Edge Hill)


Brown, Robert C. (Newcastle W)
Ellis, John (Brigg &amp; Scun)
Irving, Rt Hon S. (Dartford)


Buchan, Norman
Ennals, David
Jackson, Colin (Brighouse)


Buchanan, Richard
Evans, Fred (Caerphilly)
Janner, Greville


Butler, Mrs Joyce (Wood Green)
Evans, Gwynfor (Carmarthen)
Jay, Rt Hon Douglas


Callaghan, Rt Hon J. (Cardiff SE)
Evans, Ioan (Aberdare)
Jeger, Mrs Lena


Callaghan, Jim (Middleton &amp; P)
Ewing, Harry (Stirling)
Jenkins, Hugh (Putney)



Campbell, Ian
Faulds, Andrew
Jenkins, Rt Hon Roy (Stechford)


Canavan, Dennis
Fernyhough, Rt Hon E.
John, Brynmor


Cant, R. B.
Fitch, Alan (Wigan)
Johnson, James (Hull West)


Carmichael, Neil
Fitt, Gerard (Belfast W)
Johnson, Walter (Derby S)


Carter, Ray
Flannery, Martin
Jones, Alec (Rhondda)


Carter-Jones, Lewis
Fletcher, Raymond (Ilkeston)
Jones, Barry (East Flint)



Cartwright, John
Fletcher, Ted (Darlington)
Jones, Dan (Burnley)


Clemitson, Ivor
Foot, Rt Hon Michael
Judd, Frank


Cocks, Michael (Bristol S)
Ford, Ben
Kaufman, Gerald


Cohen, Stanley
Forrester, John
Kelley, Richard


Coleman, Donald
Fowler, Gerald (The Wrekin)
Kerr, Russell


Colquhoun, Mrs Maureen
Freeson, Reginald
Kilroy-Silk, Robert


Concannon, J. D.
Garrett, John (Norwich S)
Kinnock, Neil


Conlan, Bernard
Garrett, W. E. (Wallsend)
Lambie, David


Cook, Robin F. (Edin C)
George, Bruce
Lamborn, Harry


Corbett, Robin
Gilbert, Dr John
Lamond, James


Cox, Thomas (Tooting)
Ginsburg, David
Latham, Arthur (Paddington)




Leadbitter, Ted
Padley, Walter
Summerskill, Hon Dr Shirley


Lee, John
Palmer, Arthur
Swain, Thomas


Lestor, Miss Joan (Eton &amp; Slough)
Park, George
Taylor, Mrs Ann (Bolton W)


Lever, Rt Hon Harold
Parker, John
Thomas, Dafydd (Merioneth)


Lewis, Ron (Carlisle)
Parry, Robert
Thomas, Jeffrey (Abertillery)



Lipton, Marcus
Pavitt, Laurie
Thomas, Mike (Newcastle E)


Litterick, Tom
Peart, Rt Hon Fred
Thomas, Ron (Bristol NW)



Luard, Evan
Pendry, Tom
Thompson, George


Lyon, Alexander (York)
Perry, Ernest
Tierney, Sydney


Lyons, Edward (Bradford W)
Phipps, Dr Colin
Tinn, James


Mabon, Dr J. Dickson
Prentice, Rt Hon Reg
Tomlinson, John


McCartney, Hugh
Price, C. (Lewisham W)
Torney, Tom


MacCormick, Iain
Price, William (Rugby)
Tuck, Raphael


McElhone, Frank
Radice, Giles
Urwin, T. W.


McGuire, Michael (Ince)
Reid, George
Varley, Rt Hon Eric G.



Mackenzie, Gregor
Roberts, Albert (Normanton)
Wainwright, Edwin (Dearne V)


Maclennan, Robert
Roberts, Gwilym (Cannock)
Walden, Brian (B'ham, L'dyw'd)


McMillan, Tom (Glasgow C)
Robertson, John (Paisley)
Walker, Harold (Doncaster)


McNamara, Kevin
Roderick, Caerwyn
Walker, Terry (Kingswood)



Madden, Max
Rodgers, George (Chorley)
Ward, Michael


Mahon, Simon
Rodgers, William (Stockton)
Watkins, David


Mallalieu, J. P. W.
Rooker, J. W.
Watkinson, John


Marks, Kenneth
Roper, John
Watt, Hamish


Marshall, Dr Edmund (Goole)
Rose, Paul B.
Weetch, Ken


Marshall, Jim (Leicester S)
Ross, Rt Hon W. (Kilmarnock)
Welsh, Andrew


Mason, Rt Hon Roy
Rowlands, Ted
White, Frank R. (Bury)


Maynard, Miss Joan
Sandelson, Neville
White, James (Pollok)


Mellish, Rt Hon Robert
Sedgemore, Brian
Whitehead, Phillip


Mendelson, John
Selby, Harry
Whitlock, William


Millan, Bruce
Shaw, Arnold (Ilford South)
Wigley, Dafydd


Miller, Dr M. S. (E Kilbride)
Sheldon, Robert (Ashton-u-Lyne)
Willey, Rt Hon Frederick


Miller, Mrs Millie (Ilford N)
Shore, Rt Hon Peter
Williams, Alan (Swansea W)


Molloy, William
Short, Rt Hon E. (Newcastle C)
Williams, Alan Lee (Hornch'ch)


Morris, Alfred (Wythenshawe)
Silkin, Rt Hon John (Deptford)
Williams, Rt Hon Shirley (Hertford)


Morris, Charles R. (Openshaw)
Silkin, Rt Hon S. C. (Dulwich)
Williams, W. T. (Warrington)


Morris, Rt Hon J. (Aberavon)
Sillars, James
Wilson, Alexander (Hamilton)


Moyle, Roland
Silverman, Julius
Wilson, Gordon (Dundee E)


Mulley, Rt Hon Frederick
Skinner, Dennis
Wilson, Rt Hon H. (Huyton)


Murray, Rt Hon Ronald King
Small, William
Wilson, William (Coventry SE)


Newens, Stanley
Smith, John (N Lanarkshire)
Wise, Mrs Audrey


Noble, Mike
Snape, Peter
Woodall, Alec


Oakes, Gordon
Spearing, Nigel
Woof, Robert


O'Halloran, Michael
Spriggs, Leslie
Wrigglesworth, Ian


O'Malley, Rt Hon Brian
Stallard, A. W.
Young, David (Bolton E)


Orbach, Maurice
Stewart, Donald (Western Isles)



Orme, Rt Hon Stanley
Stoddart, David
TELLERS FOR THE AYES:


Ovenden, John
Stott, Roger
Mr. James Hamilton and


Owen, Dr David
Strauss, Rt Hon G. R.
Miss Margaret Jackson.




NOES


Adley, Robert
Carr, Rt Hon Robert
Fletcher, Alex (Edinburgh N)


Aitken, Jonathan
Chalker, Mrs Lynda
Fletcher-Cooke, Charles


Alison, Michael
Channon, Paul
Fookes, Miss Janet


Amery, Rt Hon Julian
Churchill, W. S.
Fowler, Norman (Sutton C'f'd)


Atkins, Rt Hon H. (Spelthorne)
Clark, Alan (Plymouth, Sutton)
Fox, Marcus


Awdry, Daniel
Clarke, Kenneth (Rushcliffe)
Fraser, Rt Hon H. (Stafford &amp; St)


Baker, Kenneth
Cockcroft, John
Freud, Clement


Banks, Robert
Cooke, Robert (Bristol W)
Fry, Peter


Beith, A. J.
Cope, John
Galbraith, Hon. T. G. D.


Bell, Ronald
Cordie, John H.
Gardiner, George (Reigate)


Bennett, Sir Frederic (Torbay)
Cormack, Patrick
Gardner, Edward (S Fylde)


Bennett, Dr Reginald (Fareham)
Costain, A. P.
Gilmour, Rt Hon Ian (Chesham)


Benyon, W.
Craig, Rt Hon W. (Belfast E)
Gilmour, Sir John (East Fife)


Berry, Hon Anthony
Critchley, Julian
Glyn, Dr Alan


Biffen, John
Crouch, David
Godber, Rt Hon Joseph


Biggs-Davison, John
Crowder, F. P.
Goodhew, Victor


Blaker, Peter
Davies, Rt Hon J. (Knutsford)
Goodlad, Alastair


Body, Richard
Dean, Paul (N Somerset)
Gorst, John


Boscawen, Hon Robert
Dodsworth, Geoffrey
Gow, Ian (Eastbourne)


Bottomley, Peter
Douglas-Hamilton, Lord James
Gower, Sir Raymond (Barry)


Bowden, A. (Brighton, Kemptown)
Drayson, Burnaby
Grant, Anthony (Harrow, C)


Boyson, Dr Rhodes (Brent)
du Cann, Rt Hon Edward
Gray, Hamish


Bradford, Rev Robert
Dunlop, John
Grieve, Percy


Brittan, Leon
Durant, Tony
Griffiths, Eldon


Brocklebank-Fowler, C.
Eden, Rt Hon Sir John
Grimond, Rt Hon J.


Brotherton, Michael
Edwards, Nicholas (Pembroke)
Grist, Ian


Bryan, Sir Paul
Elliott, Sir William
Grylls, Michael


Buchanan-Smith, Alick
Emery, Peter
Hall, Sir John


Buck, Antony
Eyre, Reginald
Hall-Davis, A. G. F.


Budgen, Nick
Fairbairn, Nicholas
Hamilton, Michael (Salisbury)


Bulmer, Esmond
Fairgrieve, Russell
Hampson, Dr Keith


Burden, F. A.
Fell, Anthony
Hannam, John


Butler, Adam (Bosworth)
Finsberg, Geoffrey
Harrison, Col Sir Harwood (Eye)


Carlisle, Mark
Fisher, Sir Nigel
Hastings, Stephen







Havers, Sir Michael
Maudling, Rt Hon Reginald
Sainsbury, Tim


Hawkins, Paul
Mawby, Ray
St. John-Stevas, Norman


Hayhoe, Barney
Maxwell-Hyslop, Robin
Scott, Nicholas


Heath, Rt Hon Edward
Mayhew, Patrick
Shaw, Giles (Pudsey)


Heseltine, Michael
Meyer, Sir Anthony
Shelton, William (Streatham)


Hicks, Robert
Miller, Hal (Bromsgrove)
Shepherd, Colin


Higgins, Terence L.
Mills, Peter
Shersby, Michael


Holland, Philip
Miscampbell, Norman
Silvester, Fred


Hooson, Emlyn
Mitchell, David (Basingstoke)
Sims, Roger


Hordern, Peter
Moate, Roger
Sinclair, Sir George


Howe, Rt Hon Sir Geoffrey
Molyneaux, James
Skeet, T. H. H.


Howell, David (Guildford)
Monro, Hector
Smith, Cyril (Rochdale)


Howells, Geraint (Cardigan)
Montgomery, Fergus
Smith, Dudley (Warwick)


Hunt, John
Moore, John (Croydon C)
Speed, Keith


Hurd, Douglas
More, Jasper (Ludlow)
Spence, John


Hutchison, Michael Clark
Morgan, Geraint
Spicer, Michael (S Worcester)


Irvine, Bryant Godman (Rye)
Morris, Michael (Northampton S)
Sproat, Iain


Irving, Charles (Cheltenham)
Morrison, Charles (Devizes)
Stainton, Keith


James, David
Morrison, Hon Peter (Chester)
Stanbrook, Ivor


Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Mudd, David
Stanley, John


Jessel, Toby
Neave, Airey
Steel, David (Roxburgh)


Johnson Smith, G. (E Grinstead)
Nelson, Anthony
Steen, Anthony (Wavertree)


Johnston, Russell (Inverness)
Neubert, Michael
Stewart, Ian (Hitchin)


Jones, Arthur (Daventry)
Newton, Tony
Stokes, John


Jopling, Michael
Nott, John
Stradling Thomas J.


Joseph, Rt Hon Sir Keith
Onslow, Cranley
Tapsell, Peter


Kershaw, Anthony
Page, John (Harrow West)
Taylor, R (Croydon NW)


Kimball, Marcus
Page, Rt Hon R. Graham (Crosby)
Taylor, Teddy (Cathcart)


King, Evelyn (South Dorset)
Pardoe, John
Tebbit, Norman


King, Tom (Bridgwater)
Pattie, Geoffrey
Temple-Morris, Peter


Kitson, Sir Timothy
Penhaligon, David
Thatcher, Rt Hon Margaret


Knight, Mrs Jill
Percival, Ian
Thomas, Rt Hon P. (Hendon S)


Knox, David
Peyton, Rt Hon John
Thorpe, Rt Hon Jeremy (N Devon)


Lamont, Norman
Pink, R. Bonner
Townsend, Cyril D.


Lane, David
Powell, Rt Hon J. Enoch
Trotter, Neville


Langford-Holt, Sir John
Price, David (Eastleigh)
Tugendhat, Christopher


Latham, Michael (Melton)
Prior, Rt Hon James
van Straubenzee, W. R.


Lawrence, Ivan
Pym, Rt Hon Francis
Vaughan, Dr Gerard


Lawson, Nigel
Raison, Timothy
Viggers, Peter


Lestor, Jim (Beeston)
Rathbone, Tim
Wainwright, Richard (Colne V)


Lewis, Kenneth (Rutland)
Rees, Peter (Dover &amp; Deal)
Wakeham, John


Lloyd, Ian
Rees-Davies, W. R.
Walder, David (Clilheroe)


Loveridge, John
Renton, Rt Hon Sir D. (Hunts)
Walker, Rt Hon P. (Worcester)


Luce, Richard
Renton, Tim (Mid-Sussex)
Walters, Dennis


McAdden, Sir Stephen
Ridley, Hon Nicholas
Weatherill, Bernard


McCrindle, Robert
Ridsdale, Julian
Wells, John


McCusker, H.
Rifkind, Malcolm
Whitelaw, Rt Hon William


Macfarlane, Neil
Rippon, Rt Hon Geoffrey
Wiggin, Jerry


MacGregor, John
Roberts, Michael (Cardiff NW)
Winterton, Nicholas


McNair-Wilson, M. (Newbury)
Roberts, Wyn (Conway)
Wood, Rt Hon Richard


McNair-Wilson, P. (New Forest)
Rodgers, Sir John (Sevenoaks)
Young, Sir G. (Ealing, Acton)


Marshall, Michael (Arundel)
Ross, Stephen (Isle of Wight)
Younger, Hon George


Marten, Neil
Ross, William (Londonderry)



Mates, Michael
Rossi, Hugh (Hornsey)
TELLERS FOR THE NOES:


Mather, Carol
Rost, Peter (SE Derbyshire)
Mr. Spencer Le Merchant and


Maude, Angus
Royle, Sir Anthony
Mr. Cecil Parkinson.

Question accordingly agreed to.

Resolved,
That this House authorises the Secretary of State to pay or undertake to pay by way of financial assistance under section 8 of the Industry Act 1972 in respect of the business carried on by Chrysler United Kingdom Limited, or any of its subsidiaries, sums exceeding £5 million but not exceeding £162·5 million.

HILL LIVESTOCK (COMPENSATORY ALLOWANCES)

12 midnight

The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop): I beg to move,
That the Hill Livestock (Compensatory Allowances) Regulations 1975, a draft of

which was laid before this House on 27th November, be approved.
These Hill Livestock (Compensatory Allowances) Regulations will, with the House's approval, implement the livestock subsidy provisions of the EEC directive on less favoured areas. The Regulations will replace the old hill livestock schemes, variations of which have operated under United Kingdom hill farming legislation since 1946. Hon. Members will notice that one scheme now includes aid to both hill sheep and hill cattle producers, and that it applies throughout the United Kingdom. This is a new departure and, in some ways, it represents a rationalisation that I am sure the House will welcome.
I feel that I hardly need to remind the House of the background to this directive. Hon. Members will recall that they have considered it on more than one occasion. The most recent was on 4th February this year, when Members of all parties welcomed the Commission's proposals for the directive. The matter first came up during the United Kingdom's negotiations to enter the Community in 1970–71'The Community's attention was drawn to the special problems of our hill farmers and in the Treaty of Accession the United Kingdom obtained general recognition of the need for the Community to take special measures in such areas' The issue was complicated by the original member States' desire to confine aid to mountain areas, but they were persuaded to extend it to a much wider area of land, including the livestock-rearing areas which benefit from United Kingdom hill sheep and hill cattle subsidies' The result was a draft directive that was, in most respects, satisfactory.
However, hon.' Members will recall that when they considered the Commission's proposals last February they declined to approve the proposal to limit head age payments on livestock—or compensatory allowances, as we shall have to get used to calling them—to farmers who were not receiving a State retirement pension. I am glad to say that we were subsequently successful in getting this difference of treatment removed, although each member country has to pay the full cost of all livestock subsidies paid to pensioners. With this amendment the directive was finally approved at the end of last April and member States wishing to take advantage of its provisions have a year within which to introduce their own legislation.
Since the directive was adopted we have had extensive consultations with the farmers' unions and other interested organizations on its implications. We have also taken the opportunity to reconcile the administrative differences that have developed over the years in operating the various schemes in different parts of the United Kingdom and have produced a set of Regulations to replace the 12 Statutory Instruments previously covering our hill livestock subsidies.
I now come to the Regulations. There are one or two problems to which I shall refer shortly, but I think it is important

that hon. Members should know that the draft Regulations will allow us to continue to pay about 99 per cent. of the subsidies previously paid under the old schemes without significant change. Compared with the situation three years ago, when hill farmers were concerned whether they would be able to receive support of this nature under the EEC rules, this represents a major achievement. In particular, there is virtually no change in the areas that will benefit from hill livestock subsidies. Hill areas that were fully eligible under the former schemes will qualify under the new Regulations. The farmers' unions have expressed their appreciation of these achievements.

Hon. Members: Order.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I came over to the Opposition Benches only in order to wish hon. Members a happy Christmas.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. I think that the salutations and good wishes should come a little later.

Mr. Bishop: I now turn to some of the problems that I mentioned. Hon. Members will remember that I took note of the points raised when we discussed the Hill Sheep Amendment Order on 15th October. They fall into four categories.
First, there are about 100 farms in the so-called scheduled areas in England and Wales which have enjoyed concessionary hill cow subsidies since the hill line was adjusted in 1963'These are outside the designated less-favored areas and will not be eligible for aid under the new Regulations.
Secondly, the directive restricts the payment of compensatory amounts to occupiers of at least three hectares—which is approximately 7–1- acres—of eligible land, and this means that a number of farmers who previously were able to claim will now be excluded.
Thirdly, there is no provision for acreage payments in less favored areas, and farmers in Scotland who in the past have opted for winter keep acreage grants will no longer be able to do so.
Finally, some farmers will be affected by the limitation on payment. In this


respect there has always been a slight difference in approach between England, Wales and Northern Ireland on the one hand, and Scotland on the other, but throughout the United Kingdom generally it has always been thought necessary to pay attention to the carrying capacity of the land and to limit the number of animals qualifying for subsidy.
Up till now, however, claims for sheep and cows have always been treated separately, even though they were grazing the same land. This separate treatment will no longer be possible, because the directive imposes an overall financial limitation of 50 units of account—which is about £28·50—on the amount of subsidy that can be granted per hectare. I am afraid that because of this some farmers who stock fairly heavily with sheep and cows will find that the limitation on the payments they receive under the regulations will be more severe than under the old schemes. However, I believe that some Members will welcome the principle of this overall limitation on the number of animals that can receive the allowance.
I do not wish to minimise the difficulties that these differences could cause for the persons concerned, but they affect only about 5 per cent. of the farmers eligible for hill subsidies. Moreover, we have been able to find a way round most of these difficulties. We have decided that farmers in the scheduled areas shall continue to receive assistance for two more years, comparable to what they have been receiving, and we propose to make special payments over two years to farmers with less than three hectares to ease the impact of their ineligibility for aid under the new regulations. As regards winter keep acreage grants, my hon. Friend the Under-Secretary of State for Scotland, who hopes to speak in the next debate, has plans to continue to make payments to the farmers concerned, and he will have something to say about that.
Hon Members may recall that when the directive was being considered we pressed very strongly for a higher maximum rate of payment per livestock unit and also overall, but we were unable to persuade the other member States to agree to that. However, there is nothing sacred about the present limits in the directive

and there will be opportunities in future to seek to have them revised.
There is one other provision that is new in this country and to which I should draw hon. Members' attention. The payment of a compensatory allowance will depend upon the claimant signing a simple undertaking that he will continue to farm at least three hectares of eligible land for the next five years State pensioners will be exempted from this requirement, and as soon as a farmer starts to receive a State pension his undertaking automatically lapses. The regulations provide other grounds for release from the undertaking, including circumstances beyond a farmer's control, and bearing this in mind I believe that it will be possible to administer this provision fairly.
Otherwise, such differences as one finds in the regulations are mainly of a technical and administrative nature. An example is the introduction, for the first time, of a common qualifying day for cattle and sheep of 1st January. This means that the payment of this winter's hill sheep subsidy will be deferred for about one month as, up till now, it has been paid in relation to a December qualifying date. I hope that this inevitable delay in the first year of the changeover will not cause farmers too much inconvenience. I assure the House that we are fully aware of the need to deal with farmers' claims as quickly as possible in the new year. The rates of subsidy payable under the former Order have been incorporated in the regulations, including, of course, the higher rates of hill sheep subsidy which followed the annual review earlier this year.
I am sure that hon. Members who have studied the regulations will see for themselves that, in most respects, hill farmers will continue to receive aid on much the same basis as before. We would, of course, have preferred no farmers to be adversely affected by the new scheme, but when the House considers the total absence up till now of any Community arrangement for financing this sector of farming and the reluctance of some other member States to introduce one, I am sure it will be agreed that a great deal has been achieved. I also assure hon. Members that we do not regard the matter as closed. We shall continue to take every opportunity open


to us to improve the position of our hill farmers, and when it appears desirable to modify the directive we shall press for such modifications.
Finally, I draw the House's attention to two very important considerations First, the United Kingdom will receive a substantial contribution from the EEC Farm Fund of some £12 million annually, representing 25 per cent. of the cost of running this scheme in the United Kingdom We are the largest beneficiary in the Community, so there is a substantial net gain over the United Kingdom contribution to FEOGA funds in respect of this EEC measure Second, the regulations mean that aid under the provision of the directive will continue to be given to hill farmers on an indefinite basis, giving them firm grounds for confidence in their future through the United Kingdom. They are a clear indication of the Government's intention to maintain a viable hill farming industry.
I hope the House will see fit to approve these Regulations so that they come into effect on 1st January.

12.14 a.m.

Mr. Robert Hicks: These are very important Regulations, as they are of great significance for our hill areas. The importance of hill farming both as an essential component part of the pattern of our agricultural production and as an important contributor to local economies in rural areas, where other forms of economic activity are often limited, cannot be over-emphasised. It is for these two reasons that the House must consider carefully the implications for our hill areas that are contained in these proposals.
As the Minister explained, the Regulations give effect to the implementation of the EEC directive on farming in less-favoured areas. The provisions of the proposals, in effect, replace our existing hill cow, hill sheep and winter keep schemes. But, as the Minister said, there is a fundamental change in the basis of aid provided for hill areas, in that under the existing United Kingdom schemes payments are made on a direct headage basis, whereas under the terms of these proposals there are certain financial limitations. These compensatory allowances must not exceed 50 units of account

per hectare of eligible land, which, at present exchange rates, is £28·48 Secondly, under the terms of the directive, hill farmers must occupy at least three hectares, or 7·4 acres, of eligible land.
These proposals, in one draft form or another, have been considered by this House in the past, the most recent occasion being in February of this year when, apart from the restriction on the payment of compensatory amounts to pensioners, the draft proposals were welcomed not only by the Minister in his introduction but also by agriculture spokesmen in all parts of the House.
Farmers in my own constituency, which, after all, takes in Bodmin Moor, are most anxious to see these proposals accepted by the House, because, if we do so this evening, they will be implemented on 1st January 1976'This view, expressed to me by local farmers over the past weekend, has been confirmed by the Chairman of the Hill Farmers' Committee of the NFU Everyone concerned is very anxious to see the Regulations passed this evening. Any delay in implementation could seriously jeopardize the financial position of our hill farmers. In many instances, their present cash flow situation is precarious and they are dependent upon these payments in January and February of each year.
May I ask the Minister a number of specific questions? If this measure is accepted this evening, will he say when farmers can expect payments under the revised terms of the EEC regulation? He said that he hoped that they would be made as quickly as possible. In view of the present state of the industry in the hills, we would appreciate something more definite than he has indicated so far. In replying to that specific question, will he also confirm the position if the measure is not accepted tonight?
As for the total payments to our hill areas, the Minister said that £12 million would come from FEOGA sources, making a total approaching £50 million in all Will he assure us that this will be kept under close scrutiny, in order that it may be revised to meet changing circumstances? That is a very important consideration.
With regard to the 1,200-odd farms in the United Kingdom that will be affected by the restriction of farming to a


minimum of three hectares, will the hon. Gentleman say how many are farmed by full-time farmers? Will he also confirm that at present the average payment to the 1,200 farmers who will be excluded is about £36 per year per farm, and will he expand on the phasing-out period? Will he also say a word about the purpose of eliminating these smaller units? Is it purely for administrative convenience, or is it intended to eliminate these smaller units in the overall context of the Community of Nine—to get rid of some of the smaller marginal units throughout Europe as a whole and thus take a step forward in minimising the problem of surpluses?
I now turn to the overall financial limitation of the maximum of 50 units of account per hectare of eligible land. Will the Minister say whether this limit could be revised at some stage in the future? In answer to three Parliamentary Questions that I tabled on Friday of last week, the indication was that 1,750 farms might be affected in this way, in that they might receive a lower level of hill assistance. Again will the Minister clarify the way in which this change will be implemented? What sort of time scale is involved? Above all, how will this change affect the overall pattern of production in the livestock sector, bearing in mind that the hill areas of this country are the chief source of our own stock?
I am very grateful to the Minister for explaining the position about the 100-or-so farms which, although excluded under the terms of the hill area review of 1963, still receive the headage payment, but will he confirm that, on average, this amounted to £330 per farm per year?
Finally, will the Minister briefly outline whether these changes in the method of payment will affect in any way the eligibility of hill farmers for improvement grants and other forms of financial assistance, to encourage investment in our hill areas? In particular, we would welcome clarification of the relationship between the firm proposals that the Minister has introduced tonight and the proposals outlined in the EEC Directive 72/159 on the subject of farm development and modernisation. In the past two years hill farmers have undergone some most unpleasant economic experiences. Last year's prices obtained for sheep and

cattle were extraordinarily low, due to the general lack of confidence in the livestock sector. This trend was accompanied by a rapid increase in general farm costs and two successive years of poor fodder harvests. The ability, therefore, of the hill farmer to pay his way in the last two years has not been easy. I know that prices for stock have improved this year, but the overall position, taking the last two or three years into consideration, is still far from satisfactory.
We all know the difficulties and problems that these farmers have to face because of climatic and other physical reasons. It is a distinctive way of life. But I believe that, above all, the House must recognise the importance of our hill areas to the general prosperity and overall pattern of agricultural production in this country. When the hill areas are doing well, farming generally is also benefiting What is more, hill farmers derive their income from the hills alone. In a farming context, the hill farmer has nowhere else to turn. The hill farmer is an important ingredient, and forms the backbone, in social terms, of our upland areas. Hill farming must be prosperous to prevent the further depopulation of our upland districts.
I understand that this is basically one of the principal purposes of the proposal that is before us tonight. That is why I, as the spokesman for my party, say that we accept these proposals subject to the reservations that I have mentioned, in the belief that it would be totally irresponsible to divide the House tonight and in the knowledge that the hill farmers are in urgent need of these grants. They cannot wait for an indefinite period.
If we were to reject the Regulations this evening, they would have to be renegotiated, redrafted and relaid before being ultimately approved by this House. The upland farmers of this country require the money now. That is why we do not propose to divide the House. However, we reserve the right to return to these Regulations at a later stage, for the reasons I have stated.

12.25 a.m.

Mr. Caerwyn E. Roderick: I cannot allow this opportunity to pass without making some comment on the situation in which we find ourselves. Some hon. Members were dubious about the benefits that we would obtain


from membership of the EEC. My hon. Friend said that we had achieved something by our membership In fact, we have achieved a little less than we had previously Some of us felt that we would have struggle after struggle in our membership of the EEC. It is interesting that those who were anxious that we should become a full member of the EEC are finding cause for regret on issue after issue. This is one such issue where we have marginally less benefit than previously. People are complaining that the Government are not doing their duty. I believe that the Government have done their best in bad circumstances. The EEC does not agree with us. Therefore, those folk who were anxious that we should join the EEC should not come running to us if conditions do not suit them.
My hon. Friend said that 95 per cent. of farmers would get the same benefit as previously. We are told that help will not be made available for those farming fewer than three hectares. I am advised—I think it is very good advice—that a person can hardly be farming full-time if he has fewer than three hectares. Therefore, to form a policy to cater for that category would be very difficult.
I am more concerned with those who farm more than three hectares but are heavily stocked and will miss out under these Regulations.
If we are making a profit out of this deal by receiving more than we are contributing on this section, surely this would be a good opportunity to use some of the excess funds to ensure payments to those farmers who will miss out. I am thinking not of the part-time farmer with three hectares, but of the full-time farmer who has a heavy stock on his land.

Mr. Nicholas Winterton: Would the hon Gentleman care to comment on good husbandry? It might be bad husbandry to overstock. I believe that these Regulations will be of benefit to United Kingdom agriculture, and certainly to our hill livestock sector.

Mr. Roderick: I am advised that we are concerned not with overstocking, but with extensive or heavy stocking. I take my advice from very good people. The NFU advises me that it is in favor of these Regulations but that it would still

like to see those who are heavily stocked paid a grant. The NFU is not opposed to heavy stocking. It is not necessarily bad husbandry to farm with as heavy a stock as possible.
The Press release, in paragraph 5(e), states that the effect of these Regulations will be to defer payments to hill farmers by about a month. There is a delay with regard to cattle and sheep. At this time of the year banks get a bit fussy. They are making up their books at the end of the year and if there is to be any delay, someone must persuade bank managers to hold off on the overdrafts Will the Minister advise farmers what to do in this situation? Perhaps he could pass the word down the line that the banks will get their money and that they should not be over-anxious. In England and Wales, 1st January is an important bank holiday, and bankers will be anxious that farmers should be balancing their books by that date. I hope that my hon. Friend can issue some advice and guidance on this problem.

12.31 a.m.

Mr. Geraint Howells: I must first declare my interest as a practical hill farmer living on the slopes of Plynlimon, in Cardiganshire.
These Regulations are mong the most important for the hill farming community, and I wish to make a special plea for the small hill farmers of Britain Many years ago, when I was farming at home with my mother and father, we received our first cheque from the Ministry in respect of the 200 hill ewes we kept on our mountain farm that qualified us for the hill, farm subsidy. We had limited resources and a low cash flow, so the cheque was very acceptable From that day, all the farmers in my area and in other parts of Wales, due to the introduction of the hill sheep and cattle subsidy schemes, gradually transformed the hill areas of Wales and made them more productive and prosperous Trees have been planted, roads improved and social conditions improved In the last 25 years, production has increased by well over 100 per cent. and I am convinced that if we had a 10-year expansion plan from the Government of the day the production of lamb, mutton and beef could be doubled in the hills and marginal land of Wales by the end of the century.
The old scheme did a power of good in restoring confidence. At times in the past 20 years, confidence in the livestock industry has been at a low ebb.
These Regulations seek to implement part of the EEC Directive 75/268 on aids to less-favoured areas. They will replace the current hill cow and hill sheep subsidy scheme Of the 23,000 farmers currently benefiting from this scheme, 1,200 will not be eligible for the new compensatory allowance because they are farming less than three hectares. There are 500 small farms in Wales alone that will not qualify.
An additional complication is that farmers will have to sign an undertaking that they will continue to farm three hectares of eligible land for at least five years unless they are in receipt of a State retirement pension. If anything happens to such a person shortly after receiving the subsidy that prevents his complying with the undertaking, will he or his family have to pay it back to the Government?
For breeding cows, the allowance is £24·50 per head or 50 units of account, whichever is the less. For ewes, a distinction is drawn between those of an approved breed comprised in a specially qualified flock, in which case the allowance will be £3·60 or 7·5 units of account per head, whichever is less, and, secondly, all other ewes, in which case the amount per ewe will be £2·85p, or 7·50 units of account, whichever is the less.
Fifty units of account is the maximum, and equals £28·42p, and 7·50 units of account equals £4·26p. There is an overall ceiling on the total payments which can be given at 50 units of account per hectare. Why penalise the progressive hill farmer if he has improved the land to the extent that he can keep more sheep and cattle to the acre than other farmers? Is it not possible to increase the 50 units of account to 60 or even 70 next year if the farmers are allowed to increase production from the land?
In my opinion the Government have the right to increase the hill sheep subsidy, if they wish, from £3·60p to well over £4·20p per ewe, and the hill cow subsidy from £24·56 to £29 per cow. If, during the next 10 years, the Government are keen to expand food production, as envisaged in the White Paper "Food From Our Own Resources", why this unfair

competition for British farmers, who must produce food and carry the extra cost of production while their counterparts in the Community get better treatment?
Due to the stop-go policies by Governments of the last few years, production has decreased in this country Less beef and lamb will be produced in 1976, compared with 1975, and imports are unlikely to increase, according to the hopes of the Meat and Livestock Commission market survey. The result will be higher retail meat prices, and the Minister will never please our consumers if the price of meat increases again, due to lack of Government foresight and incentives to the farmers curtailed.
The survey forecast that domestic beef production next year will total about 1 million tons—17 per cent. below the estimated 1975 level of 1,200,000 tons. In 1974, beef production was 1,100,000 tons and in 1973 it was 840,000. According to the survey, a sharp decline in beef production next year will be the result of the higher-than-expected level of cattle slaughterings this autumn. Let us look ahead to 1977.
Beef production is unlikely then to exceed 950,000 tons, assuming that the beef herd is expanding again, and live animal imports will be less. Mutton and lamb production in 1976 is forecast to be about 7 per cent. less than in 1975. Lamb slaughterings this autumn have been higher than expected, and as a result it is likely that about 5 per cent. more of this year's lambs will be slaughtered during the first three months of next year compared with the same period of 1975. The higher level of ewe cullings this year indicates a decline of 42 per cent. in the breeding flock.
Unless we move to a common agricultural policy that is fair to the farmer in every country we shall find it difficult to pay our farm workers a decent wage in Britain—and they are entitled to a decent wage like their counterparts in other countries of the Community. Farm workers move into the £50-a-week wage bracket in the new year, when they get a £6 increase in basic pay.
The latest Ministry figures show that average earnings before September had reached £46·78 for a 48·6-hour week. Foreman averaged just over £53, dairy cowmen £53·68, tractor drivers £49·33 and


general farm workers £4341, plus a tied cottage, in many districts. They deserve every penny they get. I only wish the industry could pay them more.
Why did the Minister accept the draft Regulations in the present form? They will jeopardise the future of between 1,000 and 1,500 small hill farmers in Britain, 500 of whom are in Wales Is the hon Member aware that he is penalising men and their families who are the backbone of community and rural life in Wales—small farmers who intend one day to become farmers in their own right, given the necessary incentives? Why penalise part-time farm workers—forestry workers railwaymen, postmen and others'?
Is the Minister aware that the EEC has a social policy and is doing everything in its power to stop rural depopulation, yet we are tonight discussing a draft Statutory Instrument that will deny small farmers the right to qualify for grants and subsidies—the right that they are not denied under the present United Kingdom scheme? Why should we accept such a directive from the EEC? I take it that it was agreed by the Minister.
If we accept the principle of turning a blind eye to the plight of the small man who farms seven or eight acres, will the Minister agree to eliminate thousands of hill farmers from the scheme if more draft Regulations come before the House within the next five years suggesting that "eligible land" means land of not less than 20 hectares? The principle is very important.
Why is the Minister not willing to do everything in his power to help the small farmers, instead of looking on and seeing them being led to the altar of injustice and crucified because of our political whims and the unproven theories current in Europe?
I am convinced that in the near future many changes must be made in the common agricultural policy if it is not to spell disaster to many producers and consummers. I am in favour of the CAP, but we must make sure that British Ministers have a right to negotiate the best terms for British farmers. Tonight we are experiencing an injustice to a great many small hill farmers, and many of us are not willing to tolerate such treatment I beg and plead with all right hon. and hon.

Members on both sides of the House to come to the aid of the small hill farmers who, over the years, have given of their best in their precious spare time and contributed enormously to the social life of the community. There are many aspects of the directive that I welcome, but because more than 1,500 small hill farmers are being denied the right to qualify for the subsidy, my colleagues and I will divide the House.

Several Hon Members: rose—

Mr. Deputy Speaker (Mr. George Thomas): I appeal to hon. Members to be brief. The debate ends in three-quarters of an hour, including the winding-up speeches.

12.45 a.m.

Mr. Norman Buchan: In that case, I shall be extremely brief, Mr. Deputy Speaker I shall not mention all the points that I wanted to raise but will take up only two that have been mentioned already.
The hon. Member for Bodmin (Mr. Hicks) said that if the hill land was in a poor state, the livestock industry in general would not flourish. I think that it is the other way round—that the prosperity of the hills depends on the health of the general livestock industry. That is precisely the problem we face.
I was pleased to hear the conversion to the common agricultural policy expressed by the hon Member for Cardigan (Mr. Howells)'The Liberals are now seeing their pronouncements about hill cattle coming home to roost. According to recent newspaper reports, Lardinois and the Commission are saying flatly that we are not expected to be allowed to continue with the one thing on which we could claim a victory in the CAP—the retention of the headage payment for cattle. That was the one effective achievement for our internal agricultural policy that we got from the renegotiation.
The Liberals accepted the CAP during the referendum, yet now, only a few short months later, even before the end of the year, we are told that they will resist it. We shall look with interest to see whether, on the major question affecting the hill farmers—even more than the Regulations—the Liberal Party will lead the House into opposition if our Ministers fail in their discussions.
The main complaint is that a large number of farmers—I was surprised to hear that there are 500 in Wales alone—will lose under these arrangements. Even in minor Regulations of this kind—we had to fight hard enough to extend certain aspects of our most favoured areas policy—this many people will be affected.
We were told that one of the reasons for the CAP was that social policy would be written in to protect the large-scale rural community in Europe—that this would eventually benefit the development of our rural community and social wellbeing there Hence the plea of the hon. Member for Cardigan for the small farmer with three hectares One hectare was enough for Troy, but three are now necessary before people in this situation can gain in Britain.
I hope that the Minister will understand the general dissatisfaction that has been expressed. I shall not vote with the Liberals tonight. Goodness knows, worse may yet come from Brussels.

Mr. Stephen Ross: Does the hon. Gentleman think that he has given sufficient reason for not supporting the small man tonight? He comes from a crofting area. Does he not agree that it is these people whom we should be supporting—that this is one of the main areas to which we look for our cattle-raising?

Mr. Buchan: The hon. Member is the last hon. Member, on the last Bench, to be involved in this altercation Some of us have tried to say this for a long time.
Farmers need their money, and quickly. Therefore, I shall support the Regulations, but I hope that the Minister will pay attention to the points that have been made tonight I hope that he will understand the obverse of the comments of the hon. Member for Bodmin—that what the hill land really needs is a thriving livestock industry.

Mr. Nicholas Winterton: I respect the hon. Gentleman's knowledge of the European situation Will he comment on what effect these Regulations are likely to have on the Common Market as a whole, because many of our farmers believe that there are too many small farmers on the Continent and that our

farmers are subsidising the continental farmers?

Mr. Buchan: Hon Gentlemen are not only content to smash up our motor car industry; they are trying to use the position here to smash up the small farmer in Europe. I agree that theirs is an inefficient way of farming, but there is no reason why we should take the blunderbuss of bureaucratic measures to smash a form of rural communities that enjoy life in this way. I prefer the carrot to the stick. The hon. Gentleman wants to crash them out of business. I do not go along with that. I want to help people I used to wonder why Dr. Mansholt was so keen on some of his measures if the common agricultural policy was so good.
I do not agree with hon. Gentlemen. I hope that Liberal Members will remember that when it comes to a real crunch situation and my right hon. Friend the Minister does not succeed in achieving what we want him to achieve.

12.51 a.m.

Mr. Hamish Watt: In adopting the stance that it has against the Common Market over the past five years, my party was particularly conscious of the effect that the common agricultural policy would have on the hill and upland farmers of Scotland. We always stressed that. Now time is proving us right. The third scheme, which has always worked perfectly well in the British context, is now being dismantled. First, the Beef Premium Scheme was dismantled—and we all know the disruption caused to the beef industry because of that. Now the Winter Keep Scheme and the Hill Sheep Scheme are being dismantled and once again disruption is caused to the hill farmer.
The Minister has said that only 5 per cent. of the farmers of Britain would be affected. A dashed lot of that 5 per cent. happen to be in my constituency Up and down Speyside there are many small but extremely efficient farmers who will be adversely affected by this hectarage quota. It was bad enough having to deal with acreage quotas and headage quotas, but now we have to cope with hectarage quotas. Many of the farmers of Speyside have a long tradition of buying the draft from distilleries and their farms are


heavily stocked. These small but efficient men, with the help of the draft and the heavy crops of silage that they were prepared to go out and gather in the summer, were able to stock their farms heavily. Now they are the very people who will be penalised.
How daft can the Government in London get? During the past two nights we have been spending public money like confetti, trying to keep an ailing industry alive. Tonight, for the sake of £12 million, which the Minister says he will get from the EEC funds, he has put at risk the livelihoods of many of those who are doing so much to keep this country's economic head above water.
The fantastically high bill for food imports—over £2,000 million a year—will go even higher because of this measure. This really seems crazy when we have a food industry that has a ready market for every product that it can produce. We could move to a position of putting this country near enough to self-sufficiency with the foodstuffs that these farms produce. Moreover, there is a ready market all over the world for any surpluses that our farmers care to create.
However, under the present Government—and previous Governments ; hon. Members on both sides of the House are equally guilty—we are intent on keeping going industries which will never be viable while clobbering the industry that does its level best throughout the year to provide food for the vast millions of our population.
I had not intended to divide the House tonight but, like the hon. Member for Cardigan (Mr. Howells), I am very concerned about the position of the small farmer in Scotland I have one great ambition in life When my useful days are done I hope to retire to a small croft in the north-west of Sutherland. Whether that croft will comprise three hectares I am not very sure, but I know that I shall be among many of my friends there, because for a long time I have had a close association with many of the people of that area who have come year after year to the various hill sheep sales to sell their lambs.
I am concerned about these people. Although they may not add a great deal to the business of the country, they have

a very enjoyable and very special way of life'1, for one, do not want to see it destroyed That is but one of the reasons why my hon. Friends and I will be joining Liberal Members in the Lobby.

12.58 a.m.

Mr. Wm. Ross: In view of the seriousness of these Regulations, I very much regret that the debate is limited to one and a half hours. They certainly deserve much closer scrutiny than the House can give in that period.
A certain amount of nonsense has arisen in the debate, and I should like to draw attention to one or two points that have been raised with which I cannot agree.
First, the Minister referred to E24–50 as being 99 per cent. of the moneys previously paid. He seems completely to have forgotten that inflation is running at over 20 per cent. Whether or not he knows that, it affects the farmer in the same way as it affects everyone else.
We have had a long and bitter cry about three hectares being the limiting factor. I am speaking principally from the Northern Ireland point of view tonight. Perhaps the Minister will confirm that in Northern Ireland, at any rate, there is a lower limit of 20 acres for certain farm subsidies—at least there was for help in the past, and possibly the same limits continue now.
Everyone in farming knows that the beef cow situation is a mess after last year's disastrous calf prices. There has been a recovery, this year, to the money levels of 1973. However, I have calculated that in real terms the average price of calves in Northern Ireland markets this year is at the level that it was in 1970'Hon. 'Members should keep that in the forefront of their minds.
In considering the problems of hill farmers in Northern Ireland, I ask the Minister to recall the visit of his right hon. Friend the Minister of Agriculture to Northern Ireland on 10th March this year. He said then, during a television interview, conducted at a Ballymena farm, that he would review the position of suckler producers after the autumn sales. The autumn sales have come and gone, and in view of the prices received it is time the review was carried out. When it is, we should like to know the Ministry's conclusions.
The farmers are voting with their sales. In the figrst eight months of 1973 30,000 fat cows and bulls went to slaughter in Northern Ireland. In the same period of 1974 the figure was 51,000, and this year it was 63,000. This all adds up to a clear demonstration of a lack of confidence, and points to a shortage of beef in the very near future.
We are confronted for the first time in legislation with the term "less-favoured area". This is qualified by Regulation 2(1)(a), which says that a less-favoured area
consists predominantly of mountains, hills or heath".
[An HON. MEMBER: "What about bog?"] There is not a word about bog. Yet the Official Journal of the European Communities says that the term includes areas in which the maintenance of a minimum population is not assured. It includes mountain areas and areas at a lower altitude where the land is very steep and all sorts of other qualifications
What is the Minister doing about those areas at lower altitudes? Apparently he is doing very little. What is he doing about the areas of infertile land, such as bogs, which confront me every day? With the exception of some such marginal land in County Fermanagh, which was included, nothing appears to have been done. Yet in Eire, large tracts of some of the most fertile land in Ireland—specifically in East Donegal—are included. I know that area well. It is land of the highest quality, recognised throughout Ireland as such. The Minister appears to let the Eire Government get away with nearly everything in this respect.
Another matter that concerns the people of Northern Ireland is the five-year qualifying period. That must be modified. In Regulation 3(5) we read that the farmer has to enter into
a written undertaking … that he will, for a period of five years from the qualifying day … continue to use eligible land for agricultural purposes.
If the farmer dies he will obviously not have to repay the money, but what happens if he decides to sell and move to a larger farm or another area, or if he retires in favour of a son before reaching the age at which he can draw a pension? What happens if the land is sold? Those matters are not covered by Regulation 9(a), the other regulation which

apparently deals with the problems that will arise in such cases. I should like clarification of what is intended.
I welcome the better stocking rate that will be allowed. I understand that under the old scheme the stocking rate was one cow to four acres. It is now one for 2·4 acres, a considerable improvement, but poor land, mountain land, stocked with cattle at that level can suffer damage in wet weather. The matter needs to be kept under review. On the higher quality upland farms, where the land is capable of much higher production than that, will the farmers concerned still be able to draw the beef cow subsidy for cattle in excess of the permitted stocking rate, as under the hill cow subsidy scheme? Will farmers be allowed to apply for the beef cow subsidy for the extra cattle that they manage to run on their land?
These matters worry the people who live and work in the hill areas, and they require clarification, especially on the subject of sheep. Perhaps we may be told the position. Perhaps the Minister in his reply will clarify the situation.
In Northern Ireland we have a system of conacre leases of one year and short leases of less than five years. What will happen to a farmer on such land? Will he have to repay any moneys he has received?
Special subsidies were paid in Northern Ireland in respect of fencing and other things in hill land areas. Are we to assume that those subsidies will continue under this legislation, or are they to be withdrawn?

1.6 a.m.

Mr. Richard Body: I feel almost like an intruder in this debate, because if there is one single factor about these Regulations it is that no constituent of mine could ever benefit from them. My area of Holland is known as the "hollow land" of England, in which every acre is as flat as the Floor of this House.
I bring a discordant note into the debate, because I regret the complacent way in which we allow money to go to certain parts of our farming industry. I appreciate that it is not our taxpayers' money but that it comes from FEOGA, and that that, in turn, comes from the taxing of food in this country and in the rest of the Community. Therefore, by


the use of levies, and so on, we are excluding meat from the Argentine, Australia and elsewhere, and with the proceeds we are subsidising certain farmers in this country.
I was worried about some of the language used by the hon. Member for Cardigan (Mr. Howells), who spoke as a protectionist advocating still more protection for certain farmers in this country. But what do he and others mean when they say that this money is urgently needed? The hon. Gentleman said that this money was most important for the hill farmer. What he meant to say was that unless this money is forthcoming some people will be put out of business.

Mr. Geraint Howells: Not some of them; all of them.

Mr. Body: That must be clearly understood, and I hope that it will be understood by the farmers in my constituency and by my neighbours. As a farmer, I do not wish to see these subsidies, and would rather carry on without them.
We are dealing here with a compensatory allowance. It is a new piece of jargon. The word "compensation" applies to those on the land who cannot earn a living without subsidy. This means to say that we are inducing marginal producers—in the economic as well as in the farming sense—to engage in increasing production when the market is under considerable strain.

Mr. Gwynfor Evans: Is the hon. Gentleman aware that we are not solely concerned with the market or just with pounds, shillings and pence; we are concerned also with society and the quality of the community. We are concerned with keeping the farming and agricultural community in existence. Is that not justified by this kind of assistance?

Mr. Body: That is an honest argument that one can respect. The less respectable argument comes from the Liberal Bench. One thinks of what used to be said from the Liberal Benches. The Liberal spokesman tonight spoke of expanding meat production by 50 per cent.

Mr. Geraint Howells: By 100 per cent.

Mr. Body: Very well, by 100 per cent. But it is to be done through the use of

subsidies. The hon. Member said that this increase was most important and could not be achieved without subsidies. He said that he would vote against the Regulations because they do not go far enough—that there is not enough money for these marginal producers. By all means enter the social argument and make the point that the hills of England, Wales and Scotland provide amenities for the holidaymaker and for the country as a whole and therefore those who live there are guardians of the countryside who need some supplement to their income. That may be a respectable argument, but I discount it.
What is not respectable is to seek taxpayers' money to subsidise production that is at the same time forcing producers in other parts of the world to go destitute. When the hon. Member talks of a 100 per cent. increase I wonder whether he realises that at the moment beef in Australia and the Argentine is a poor man's food. Last week it was possible to buy a steak in a town in the Argentine for the equivalent of 10p. That is an absolutely derisory price, which we have not seen for many years. This has come about because we are preventing meat from entering this country by a system of tariff and non-tariff barriers—

Mr. Geraint Howells: I wonder whether—

Mr. Deputy Speaker: Order. It is not fair for hon. Members to intervene in this way when other hon. Members want to take part in the debate. There are only a few minutes left.

Mr. Body: I am sorry that I have been diverted, Mr. Deputy Speaker. From all the accounts of those who are dealing with the wholesale trade—and I have to deal with it regularly—demand for beef is weak and likely to remain so for a long time. This is serious for those efficient producers in the United Kingdom who are perfectly capable of producing meat without a subsidy. The effect of the subsidy, or compensatory allowance, will be to induce marginal producers to produce more than they would otherwise produce. That will have the effect of weakening the market and making it more difficult for the efficient producers to operate. At the same time, it will have the effect of forcing up the price of meat to the public.

1.13 a.m.

Mr. Hector Monro: I do not think that we have sufficiently highlighted the impact of inflation on hill farmers and those who are existing on winter keep in this current year. They have faced dramatic increases in costs—particularly because of transport difficulties and the problems inherent in being far from centres of distribution. On that basis alone I would have expected the assistance proposed tonight to be at a marginally higher level than that which is being put forward.
I want to deal with the more practical implications of the designation of the less-favoured farming areas and ask how the Government have reached the conclusions set out in Document 128/260, which details the parishes that are eligible and those areas that are to be partly favoured. How has the list been compiled. Will all farmers be reclassified, so that some are eligible and some are not?
I have to ask the Minister to reply to a constituency point on this debate because it will be too late to raise it on the next debate, concerning the Scottish winter keep, and anyway it would be out of order to do so. Will the hon. Gentleman say which are the two parishes in my constituency that are missing from these provisions? Each Scottish parish has a number, and the parishes in question are numbered 298 and 323. This is vital in an area in which winter keep has been an important part of the income of hill farmers. If my question could be answered I should feel much happier and more in agreement with the Government over these Regulations.
We should be told how the classification has been drawn up. It is far from obvious which parishes are in and which are out. What is the basis upon which the Government have reached their decision?

1.16 a.m.

Mr. Bishop: I welcome the support of the hon. Member for Bodmin (Mr. Hicks) on these Regulations. It is helpful for the House to know that he and his party support them. The hon. Member asked whether the limit of 50 units of account could be revised. There will be opportunities in the future to try to get it raised. He asked how many farms below three hectares were run on the basis

of full-time units. It is extremely unlikely that any of the farmers concerned are full-time farmers.
He asked how much subsidy was paid to small farmers. The average figure is £36 a year. The total is £42,000 out of about £50 million. He asked why farms of less than three hectares were excluded. The decision is in accordance with Community policy of improving farm structure. He wanted confirmation that the average payment to farms in scheduled areas was about £330, and I think that is the right figure. He also asked about relationships with Directive 72/159. The Regulations deal only with compensatory allowances and revision of the capital grant scheme will follow in due course.
The hon. Member for Cardigan (Mr. Howells), who, like the hon. Member for Bodmin, has a deep interest in this measure, asked whether it was right to exclude farms of less than three hectares. I can only refer him to the reply I gave to the hon. Member for Bodmin. This point was taken up by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan). We must get this aspect of the matter into perspective. The people who operate these small units are not farmers in the true sense of the word. It is not even a significant part-time occupation for them. The average amount of subsidy is £36 a year. We are making arrangements to continue to provide aid to these farmers at about the current level for another two years, as I explained in my opening remarks.
The hon. Member for Londonderry (Mr. Ross) asked about the Northern Ireland limits and the need for more aid for the suckler herd. The limits and rates applied by the regulations are precisely the same for Northern Ireland as they are in the remainder of the United Kingdom. As regards the hon. Gentleman's point about the suckler herd, the prices at autumn store sales have improved since last year. I appreciate that there is some pressure for aid, but this is a matter that is under consideration in the Annual Review.
The hon. Member for Banff (Mr. Watt) said that most of the farms affected by the hectare limit are in his constituency. The total number of farms in Scotland affected by the overall limit is about 250, of


which I would have thought only a handful were in the hon. Gentleman's constituency. There will be few crofters who will be affected by the three hectare qualification because of their share of common grazings. That is a matter that will be taken into account.
My hon. Friend the Member for Brecon and Radnor (Mr. Roderick) asked whether we could not use some of the FEOGA money to supplement the subsidy to heavily stocked farms. Several other hon. Members referred to the payment limits. We have to comply with the limits in the directive. We cannot pay more than 50 units of account per hectare on any eligible farm. We have tried to persuade other member States to agree to a limit of 60 UAs but we were unable to do so on the last occasion. There will be further opportunities to press this case and I note the views that have been expressed.
The hon. Member for Londonderry asked about the five-year undertaking for those who are eligible and whether farmers would be eligible for beef cow subsidies on cattle in excess of the limits. The answer is "No" to the hon. Gentleman's latter question. As the hon. Gentleman said, the stocking limits are more generous under the new regulations. His question about the five-year undertaking is of considerable importance. I know that the requirement in the Regulations is worrying some farmers. I can assure the House that we intend to interpret this provision as flexibly as possible.
The undertaking to continue farming three hectares of eligible land for five years should not be unduly onerous for most hill farmers. Moreover, there are a number of escape clauses in the Regulations if a farmer has to move away from the hills because of circumstances beyond his control. If that is the position the farmer can be released from his undertaking. In my experience most hill farmers are still fit enough to continue until pensionable age. I believe it unlikely that they will wish to refuse to take a State retirement pension. It is an important point that we intend to operate the regulations with a great deal of flexibility.
The hon. Member for Cardigan asked about the increase in the hill sheep subsidy. The appropriate level of the subsidy is under discussion in the Annual Review.
Reference has been made to the eligibility of land. The less-favoured areas will virtually coincide with the areas determined in the hill livestock subsidy schemes. Determination of land eligibility for compensatory allowances within those areas will follow the same rules as have been applied to the determination of land eligible for the hill livestock subsidies. Farmers who qualify for the full range of the hill farm subsidies will normally be eligible for the new allowances, and the areas of hill farmers' land will remain unchanged.
Eligible land in Scotland will coincide with the areas of livestock rearing land determined in the recently revoked hill livestock subsidy schemes. This means that land which was eligible for the hill cattle or hill and upland sheep subsidy will be eligible under the new schemes with the exception of a small number of holdings of less than three hectares. As hon. Members know, three hectares is about seven and a half acres. They are ineligible in the EEC directive.
The procedure for determining whether land within the less favoured areas is eligible for the payment of compensatory allowances is unchanged from the system that applied in the case of the livestock subsidies.
I want to deal briefly with the matters raised about farmers in the so-called scheduled areas. The point is that some 100 farms which lay outside the hill line under the old Hill Livestock Subsidy Scheme were allowed to continue receiving hill cow subsidy, but no other hill farming subsidy or grant, after the 1963 review of the hill line. It was never the intention that the arrangement should be permanent. This concession has led to anomalies in respect of adjacent land outside the hill areas. But farmers in this category will be able to claim the beef cow subsidy on their cattle. We intend to carry on aid to this area, as in the case of those in areas of less than three hectares, for another two years. This will phase out any difficulty, and it is always subject to review from time to time.
With regard to the FEOGA contribution, I should say that the expenditure by member States in pursuance of this directive will attract reimbursement from FEOGA currently at the rate of 25 per


cent. This means that FEOGA will contribute £12 million to the United Kingdom's annual expenditure on the new allowances, which is estimated at just under £50 million. The United Kingdom expects to be a net beneficiary under this directive.
The hon. Member for Bodmin asked about the payment. The answer is that we hope to start to make payments by mid-January, and certainly as early as possible in the new year.
I was asked how many farmers eligible for the old subsidies will not qualify for the new compensatory allowances. The figure is about 1,300. But 1,200 of these farms are less than 3 hectares, and most of the farmers are part—time. About 100 farms in the scheduled areas will not qualify, but they will be helped by the measures which will be applied for the next two years.
The hon. Member for Bodmin asked what would happen if these Regulations were not passed. The position is that the existing legislation has been suspended and put into cold storage. It is no longer applicable. Until these Regulations are passed, we have no authority to pay the new allowances. We want to pay them from 1st January. This is a very important factor which the House should bear in mind.
In these Regulations, the Government have achieved by far the majority of the aims that we set out to achieve and which were mentioned in our debates in February and October of this year. I

notice that on 4th February the hon. Member for Cardigan, who has been so critical tonight and talked about dividing the House, began his remarks by saying:
Liberal Members welcome the draft directive, which will do a power of good to the sheep industry."—[Official Report, 4th February 1975; Vol. 885, c. 1291.]
Yet tonight this directive is being opposed by the Liberal Party. If the Regulations are not passed, hill farmers up and down the country will know where to place the responsibility.
The hon. Member for Cardigan asked why this measure should be supported. There are a number of reasons. We have to make the best use of the directive, which has achieved most of our aims. Only 1,870 farmers in the United Kingdom out of 63,000 beneficiaries will receive less. But these are early days, and the directive does not rule out the possibility of review. The United Kingdom will receive £12 million, representing 25 per cent. of the cost of the scheme. The United Kingdom is the largest beneficiary in the EEC, and there is a substantial gain over our contribution to FEOGA funds in respect of this measure.
Those are factors which we cannot ignore. In the interests of the small farmer and the industry generally, the House will be well advised to give its full support to the Regulations. If it does not, we are not empowered to pay the benefits which the small farmer expects from these Regulations.

Question put:—

The House divided: Ayes 66, Noes 19

Division No. 21.]
AYES
[1.30 a.m.


Bagier, Gordon A. T.
Harrison, Walter (Wakefield)
Roderick, Caerwyn


Bishop, E. S.
Hart, Rt Hon Judith
Rodgers, George (Chorley)


Boardman, H.
Jackson, Miss Margaret (Lincoln)
Ross, William (Londonderry)


Bray, Dr Jeremy
Jones, Alec (Rhondda)
Rowlands, Ted


Brown, Hugh D. (Provan)
Jones, Barry (East Flint)
Sandelson, Neville


Buchan, Norman
Kerr, Russell
Small, William


Cocks, Michael (Bristol S)
Leadbitter, Ted
Snaps, Peter


Cohen, Stanley
Lyons, Edward (Bradford W)
Stoddart, David


Coleman, Donald
McCusker, H.
Stott, Roger


Concannon, J. D.
McElhone, Frank
Strang, Gavin


Conlan, Bernard
McNamara, Kevin
Tomlinson, John


Cox, Thomas (Tooting)
Mahon, Simon
Urwin, T. W.


Craigen, J. M. (Maryhill)
Mellish, Rt Hon Robert
Wainwright, Edwin (Dearne V)


Cryer, Bob
Molyneaux, James
Williams, Alan (Swansea W)


Cunningham, Dr J. (Whiteh)
Monro, Hector
Winterton, Nicholas


Dean, Joseph (Leeds W)
Noble, Mike
Woodall, Alec


Dormand, J. D.
O'Halloran, Michael
Wrigglesworth, Ian


Ellis, John (Brigg &amp; Scun)
Ovenden, John
Young, David (Bolton E)


English, Michael
Parry, Robert



Fletcher, Ted (Darlington)
Pavitt, Laurie
TELLERS FOR THE AYES:


Golding, John
Pendry, Tom
Mr. Joseph Harper and


Grant, George (Morpeth)
Powell, Rt Hon J. Enoch
Mr. James A. Dunn.


Gray, Hamish
Richardson, Miss Jo



Hamilton, James (Bothwell)
Rippon, Rt Hon Geoffrey





NOES


Bain, Mrs Margaret
MacCormick, Iain
Welsh, Andrew


Body, Richard
Pardoe, John
Wigley, Dafydd


Crawford, Douglas
Penhaligon, David
Wilson, Gordon (Dundee E)


Evans, Gwynfor (Carmarthen)
Reid, George



Freud, Clement
Ross, Stephen (Isle of Wight)
TELLERS FOR THE NOES


Henderson, Douglas
Steel, David (Roxburgh)
Mr. Cyril Smith and


Hooson, Emlyn
Temple-Morris, Peter
Mr. Russell Johnston.


Howells, Geraint (Cardigan)
Watt, Hamish

Question accordingly agreed to.

Resolved,
That the Hill Livestock (Compensatory Allowances) Regulations 1975, a draft of which was laid before this House on 27th November, be approved.

WINTER KEEP (SCOTLAND) (REVOCATION) SCHEME

1.40 a.m.

The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): I beg to move,
That the Winter Keep (Scotland) (Revocation) Scheme 1975, a draft of which was laid before this House on 9th December, be approved.
The revocation of the Winter Keep (Scotland) Scheme 1975 is consequential on the adoption of the European Economic Community's less-favoured areas directive, the implementation of the compensatory allowance provisions of which we have just debated very fully.
The Scheme provides for the payment, in Scotland only, of annual grants in respect of specified crops for the winter feeding of livestock. These acreage payments were introduced in 1964. Since 1967, farmers have had the option of taking acreage grants or supplements to the headage payments on livestock under the hill cattle or hill and upland sheep subsidy schemes.
There is no provision for payment of compensatory allowances on production other than livestock in the areas of the United Kingdom which have been approved as eligible for the purposes of the directive. It would therefore be illegal to continue to make such payments after the directive is implemented and it would set at risk the substantial contribution which the United Kingdom will be due to obtain from Community funds towards the cost of paying the livestock compensatory allowances under the directive. This is estimated at about £12 million for 1976. Hon. Members will

note, however, that the Revocation Scheme safeguards payments which are still outstanding in respect of winter keep crops grown in 1975
The House will wish to know what effect the termination of this Scheme will have on the income of farmers who have been receiving the winter keep acreage payments. In 1975, about 1,800 of the 13,000 Scottish farmers eligible for winter keep payments chose to take them in the form of acreage grants. About 1,100 of these will be eligible for compensatory payments on adult livestock. Some farmers will receive a reduced payment because of the restrictions under the Compensatory Allowances Regulations, but in the majority of cases they should be minimal.
The remaining 700 farmers have enterprises which are based mainly on the rearing of bought-in young cattle, and they have few or no adult livestock eligible for compensatory allowances.
I had hoped that I would have been able to submit to the House, along with the Revocation Scheme, an alternative scheme for the payment of grants to farmers who were previously eligible for winter keep acreage grants and are not catered for under the Compensatory Allowances Regulations, but the arrangements are not yet finalised. I can assure the House, however, that it is our intention to continue to provide aid to the persons concerned for a further period and I shall be presenting proposals for that purpose early in the New Year.
With that explanation I hope the House will approve this Scheme.

1.44 a.m.

Sir John Gilmour: At first sight, it might seem right to accept with-out question what the Under-Secretary has put forward, but I was slightly alarmed to hear that 700 farmers would be excluded altogether, though he went on to say that he was hopeful that something might be done for them in future.
Table 25 on page 41 of last year's Annual Price Review shows a forecast winter keep payment of £11·3 million in 1974–75. The hon. Gentleman has told us that 1,800 farmers chose to accept winter keep but that only 1,100 will be eligible. There seems to be quite a large amount of money in the difference between the estimated £11·3 million and what has been paid out to the 1,100 farmers who will qualify.
It is also right to question at this time whether we shall be able to help livestock farmers as adequately as we should be able to, because what we were doing with winter keep at a time of high transport costs was encouraging people to grow the food where it was needed and therefore to cut down the need to spend money on transportation. This is particularly important to the Islands. The effect on Mull, the Outer and Inner Hebrides and Orkney and Shetland of this change may be considerable.
Is it right, therefore, to say that the compensatory allowance should be exactly the same on the mainland and on the Islands? Would it be possible at some time to raise with the Commission whether the Island communities should not have some different amount of compensatory allowance?
I am also slightly worried that, when one looks at the reasons for how the amount is designated, one is told in the official document that one of the characteristics is either low or dwindling population. What happens in an area such as Shetland, where there is increasing population because of the oil industry, which is having no effect on improving the profitability of the farmer there? He is just as much in need of help even if the population is growing. If he is to make a living, he will need help in the same way.
The map with the document shows almost the whole of Scotland coloured green and therefore eligible for these compensatory payments. Earlier, my hon. Friend the Member for Dumfries (Mr. Monro) raised the question of which parishes are and are not included. We would like some idea how it is possible for people to appeal against the rota, as it were, as drawn up at present, and whether farmers dissatisfied that their part or part of a parish is or is not included have some right to take the matter up.
There has been and is the difficulty of hill and upland areas which will be affected by the change. This was illustrated by an article in the Scottish Farmers' Leader for November. A Sutherland council member of the NFU reported on sheep prices in Sutherland and gave the example of a cheviot wether lamb sold at £9·54 in 1973 and £9·72p in 1975, a difference of 18p over a period of two years. But if one takes into account the changes in the retail price index—the effects of inflation—the price should have been £14. Thus, real hardship is being experienced by hill and upland farmers. I hope that the hon. Gentleman will be able to put some of the doubts I have expressed at rest.

1.49 a.m.

Mr. Hector Monro: This scheme has done a very good job for the uplands farmers for 11 years. We should put on record that it was a good scheme which was introduced for a particular purpose, to help provide winter keep in areas where it was not easy to grow hay and even oats.
I agree with what my hon. Friend the Member for Fife, East (Sir J. Gilmour) said about the areas that will be eligible for the new Scheme and those that will not. The Minister may have heard what I said in the previous debate about the difficulty of understanding why some parishes are in and some out.
In a more general context, will the Minister give a broad indication where the farms which will lose out altogether are situated? He may tell us, for instance, that a great many farms in Banff will not get the grant. If he could tell us about the East coast or the South-West it would be of interest. I am genuinely seeking information.

Mr. Hugh D. Brown: I shall need to do a little research to trace the two missing parishes, but I assure the hon. Member for Dumfries (Mr. Monro) that I shall do so with due care and diligence, because it must be a matter of great importance. As usual, the hon. Member for Banff (Mr. Watt) is completely wrong. My information is that only a handful of farmers in Banff will be adversely affected.
I remind the hon. Member for Fife, East (Sir J. Gilmour) that the original


Scheme was an option. It has been declining over the years. The new Scheme, together with the normal subsidy arrangements will replace it. We are satisfied that only a tiny minority of farmers will be adversely affected. We still hope to be able to do something to compensate those who are adversely affected under the new Scheme.

Mr. Norman Buchan: In his earlier speech the Minister said that he hoped that some of the 1,300 would receive compensation for a further period. Has he in mind an interim period, or a continuous scheme?

Mr. Brown: My hon. Friend cannot tempt me on that. We hope to be able to submit a scheme in due course for the payment of grants to farmers who were previously eligible for the winter keep acreage grants and are not catered for by the new compensatory allowances. I cannot go further than that, except to say that in general it will be an attempt to make sure that those farmers are no worse off than they are now.

Mr. Russell Johnston: In response to a question asked by the hon. Member for Fife, East (Sir J. Gilmour) the Minister said that only a handful of farmers in Banff will be adversely affected. That presumably means that he has a rough idea of the dispersal of the farms concerned. Will he give me a rough idea of the dispersal of the farms in the Highlands that will be adversely affected?

Mr. Brown: Crofts are covered not by the Scheme but by separate provisions. As it is a headage payment it is mainly the better-off farms—probably mostly in Aberdeenshire—the more prosperous hill farms that will be adversely affected. This is so for obvious reasons. They are carrying a stock well above the level which it is intended to assist. In spite of that, since it is taking something away, which we think is undesirable, we are proposing to do something about the position.
We are talking in terms of 700 possibly being excluded. The amount of money involved in that exclusion is about £200,000, but the total payments are £21 million. I think that that gives some idea of the small number of those

excluded—which, I repeat for the third time, we intend to do something about.
I think that I have answered most of the questions. I hope that with that brief explanation, the House will accept the Scheme.

Mr. Andrew Welsh: Before he sits down, will the Minister answer the question about appeal mechanisms?

Mr. Brown: I did not realise that I had been asked such a question.

Mr. Welsh: Yes—by the hon. Member for Fife, East (Sir J. Gilmour).

Mr. Brown: I thought that the system was well understood. The farms will still be working on the same classification system. There is no change in that or in the machinery. The areas have been agreed in the less-favoured areas directive.

Sir J. Gilmour: What I think I wanted to ask the Minister was how people aggrieved about being left out could appeal to get themselves put back in.

Mr. Brown: The hon. Gentleman means, how do they make their views known to the Government? That is what hon. Members opposite have been doing. The NFU has already made these representations. In due course, I think that we shall be able to satisfy those who have made representations.

Question put and agreed to.

Resolved,
That the Winter Keep (Scotland) (Revocation) Scheme 1975, a draft of which was laid before the House on 9th December, be approved.

BISCUITS AND SHORTBREAD (PRESCRIBED QUANTITIES)

1.57 a.m.

The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams): I beg to move.
That the Weights and Measures Act 1963 (Biscuits and Shortbread) Order 1975, a draft of which was laid before this House on 1st December, be approved.
I do so, much as I dislike being controversial at this time of night. In view of the large number of hon. Members who obviously want to take part in this debate, I shall be untypically brief in moving the motion. I am sure that


most of the points covered in the Order will be acceptable to hon. Members.
The object of the Order is to ensure that the prescribed quantities legislation applies to pre-packed biscuits. This will be the first prescribed quantity legislation since the 1963 Weights and Measures Act. It is therefore something of a landmark. It is interesting to note that, at that time and indeed earlier, it was thought that this was a product to which it would be virtually impossible to apply the prescribed quantities provisions, for technical reasons.
At the moment, biscuits may be pre-packed in any quantities. As little as ¼ oz sometimes separates packet sizes. Between the weights of 3 oz and 8 oz, there are 21 different sizes or weights of packets of biscuits on the market. Obviously, this makes it virtually impossible for the housewife to make valid comparisons, and it is difficult to distinguish one size of packet from another. This situation has arisen partly because of changes in the types of biscuit produced, but also as firms have, for legitimate reasons, chosen to shave small amounts off the quantities rather than raise traditional prices.
Section 54(2) of the Weights and Measures Act requires us to consult representatives of interests substantially affected by the Order. This we have done. Approximately 80 bodies representing manufacturers, retailers, wholesalers, consumer groups and enforcement authorities have been consulted. With some minor exceptions the industry has accepted the Order as fair and reasonable. Consumers have, in general, welcomed the proposals, though with some slight reservations about the number of packs permitted at the lower level, although I believe they realise the validity of the industry's argument that to make too radical a change in one step would add to the costs of the changes in machinery that would be required. I am sure, particularly in the context of inflation, that hon. Members would not want us to undertake measures which would unnecessarily increase prices when perhaps we can move to a further stage in the near future.
Therefore, I suggest that we examine this range of sizes as it operates and in the light of experience and any proposals that come from Brussels decide whether

subsequently there is any need to amend the range offered. There is no EEC legislation at present on biscuits or shortbread.
In 1951 the Hodgson Committee reported on its review of the 1926 Weights and Measures Act. It quoted biscuits as an example. It said:
… there are cases where manufacturing difficulties make it almost impossible to guarantee that a reasonable number of packages can be produced to a specified weight. This mainly arises where the package consists of a small number of large units, the weight of each of which is liable to substantial variation in the course of manufacture.
It went on to specify biscuits as a prime example of a product where these difficulties arise. Therefore, it is a commendation of the co-operation that we have received from the industry that, despite the unpromising start, we have been able to bring this Order forward.
The main point of the Order, as hon. Members will appreciate, is that in future the weight of biscuits and shortbread will have to be declared when they are sold in quantities above 50 grammes or about 2 ounces. This is a slight improvement in consumer protection because at present it applies above 4 ounces. Therefore, there will be a declaration of quantity on small packs in the future. Above 85 grammes, which is about 3 ounces, biscuits may be prepacked only in prescribed quantities.
The upshot on the change that we envisage here is that instead of the 21 imperial pack sizes, which currently exist and to which I referred earlier, we shall have about six different sizes of pack. This will later become five. There is a dual range—an imperial and a metric range—because of the requirements of Section 10(10) of the Act, which at some later stage in the Session we hope possibly to amend. However, the industry has made it clear that it intends to produce from the metric range. That is why we have concentrated on making sure that it is the most convenient arrangement from the consumers' point of view.
Shortbread in pieces exceeding 200 grammes or 7 ounces need not be weight marked. This is to help the small producers. Whereas biscuits are, in general, produced by a few large manufacturers, shortbread is produced by quite a considerable number of small producers, many of whom are in Scotland. If we


tried to make them conform to prescribed quantities unnecessarily, they would be presented with unjustifiable difficulties as there has not been any suggestion of any major abuse in this sector.
Hand-baked biscuits—those which are baked, pre-packed and sold by the producer on his premises—need not be sold in prescribed quantities but must still be weight marked if they are pre-packed and above 100 grammes in weight.
Wafer biscuits, of the sort which are normally associated with ice-cream, must be sold by count.
Finally, in Article 6(1) we have tried to make provisions for the multi-pack type of presentation of biscuits—as well as other commodities, but it is biscuits that the Order deals with—which we now find in the supermarkets.
Therefore, while perhaps not world-shaking in its immediate impact, the Order will have considerable value for the housewife and will be of help to many older shoppers. I commend it to the House.

2.5 a.m.

Mr. Norman Lamont: I apologise for the formal nature of my dress tonight. From reading the history of the 1922 Committee the other night, I know that there have been many heated debates in the House whether it is proper for a Member to address the House wearing a dinner jacket. I apologise. No discourtesy was intended. Perhaps my post-prandial dress is appropriate to the subject we are discussing. I know that some people think that it is very appropriate to appear in formal dress. I heard not long ago that when one young Member arrived here he was told that if he had any confusion about how to vote he should always follow the black ties.
The Opposition welcome the principle of extending the prescribed quantities. As the Minister has said, this will be of valuable assistance in helping consumers to make comparisons. In extending it to biscuits we are extending it to an important area, because biscuits are quite an important part in households' consumption—more important, indeed, than some of the subsidised foods. We have debated prescribed quantities of salt and pasta, but those are very small matters

compared with the importance of biscuits in the family budget.
There are a number of brief points that I should like to put to the Minister. He referred to the range of quantities in which biscuits are sold at present. As I understand it, it is normal, despite the range of quantities at present, for biscuits to be sold in, say 4 oz, 8 oz and 1 1b packs. We seem to be moving, for the sake of harmonisation, to rather unfamiliar sizes—3½ oz, 7 oz and 10½ oz—in order to get their metric equivalents. These seem to be rather unusual sizes simply to get the advantage of harmonisation.
I notice that the Explanatory Note says that no firm proposals have been put yet as regards the harmonisation of prescribed quantities on biscuits, but I imagine that the Government have had some discussions in this context and obviously have framed their regulations with eventual harmonisation in mind. I shall be grateful if the Minister will tell us a little about those discussions and what he anticipates.
The other point that I should like to make simply is that unless we get metrication fairly quickly, dual marking will exist despite what the industry may have assured the Minister and despite what its intentions may be. Therefore, we should like to know when we shall be hearing the Government announcement about metrication. We were told that we might get something in July, and then in November. We have been waiting with bated breath for quite a long while. If the Minister could enlighten us on that point, that would make this a worthwhile debate.

2.9 a.m.

Mr. Giles Shaw: I reinforce the point made by my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) about metrication. The order is another indication of a somewhat piecemeal approach to this general problem. We had a debate on unemployment yesterday afternoon, and it occurs to me that the orderly changeover to metrication of a number of industries, including the food industry, could involve a number of important jobs on the engineering and technical side.
All industries will require a long changeover period, with plenty of notice.


They require an orderly changeover period in which the alteration of wrapping machines, moulding machines and so on can be carried out. It will be a costly operation. The longer the lead time, and the more orderly the change, the better the consumer will be served ultimately. I hope that the Minister will give us a fairly decisive view on that tonight.
I must declare an interest in the matter, in so far as I am associated with a food manufacturer. The Order is the first to prescribe quantities in the non-subsidised food sector. It is significant, because it is part of the gradual transition to the implementation and harmonisation of EEC measures for pre-packed solid food to be sold in fixed weights. One can understand that this will be a long and gradual process.
The free-market man must weep a small tear at the loss of any manufacturer's individual capability to alter product sizes and presentations, but obviously the Ministry is right. There is a consumer benefit and a benefit in production and standardisation which manufacturers will readily accept.
I should like to make two basic points. First, the range of weights is accepted by the industry concerned. Although my hon. Friend is right to draw attention to the omission of certain traditional weights, such as 8 oz. and 16 oz., I think that in general pre-packed biscuit weights tend to be rather peculiar or atypical. However, does the Minister agree that this should not be taken as a precedent in dealing with the decisions on fixed weights which will undoubtedly be made in other food sectors, where my hon. Friend's point about the 8 oz. and 16 oz. packets is significantly more important? I should like the Minister's assurance that he will have an open mind on this point when negotiating other fixed weight scales. We would not wish to see a plethora of different ranges. Where other weights are valuable to the consumer and traditional to consumer acceptance, they might be considered for suitable ranges of food products.
My second point relates specifically to the biscuit industry and the 175 gramme weight which it uses at present. I understand that this could have an important bearing on the industry's export potential. It is a weight which is readily obtainable

on the Continent. I should like the Minister's assurance that although this is in the Order for expiry in, I think, 1981, he will review the matter. He might wish the industry to make representations to him on whether the weight of 175 grammes should remain or whether another weight should be substituted. It must be in the interest of the industry to retain its export market and to be allowed some flexibility within the scale of weights.
I hope that experience will show that this is a sensible measure, and that the consumer will ultimately benefit. Certainly we welcome the Order.

2.14 a.m.

Mr. Alan Williams: The appearance of the hon. Member for Kingston-upon-Thames (Mr. Lamont) only helps to adorn our proceedings. If he is a little disturbed at coming here from a party, he is nowhere near as worried as I am, because those who advise me have also just come from a party. Therefore, this may prove to be a rather original winding-up speech.
The hon. Member for Pudsey (Mr. Shaw) made a rather peculiar request. He asked me to give a fairly decisive view. It is beyond me why we should create a precedent at this time of night. It is a temptation that I find easy to resist.
The hon. Member for Pudsey asked whether these weights would be a precedent for other food sectors. I see no reason why they should be. After all, the Conservative Government, in a massive contribution towards the advancement of metrication, produced two little mice of Orders—namely, one on pasta and one on salt. Even those ranges did not agree. I do not see why we should assume that a range set in one respect should predetermine the range in another respect. In deciding any range there are technical reasons in regard to type of machinery and packing to be taken into account. I accept the hon. Gentleman's point and give him the assurance that he requires.
The hon. Gentleman also asked whether I would review the position in regard to the 175 grammes. I have indicated that we are willing to review the range in the light of experience. Any review would probably further restrict the range. We are already cutting from a figure of 21 to an initial figure of six,


and then we intend to go down to five. The packing involves weights of 3 oz and 8 oz. I would like to see it reduced further, and if any insuperable problems arise, I am willing to examine them. But I caution that at this stage I do not envisage changing the Order, but one cannot be sure what may happen.
Both hon. Gentlemen touched on the unfamiliar sizes in the imperial range. The reason why they are unfamiliar is that they will not be produced, but under Section 10(10) of the Act we have to include the imperial range. Industry will produce metric packs and the important consideration is to get convenient metric sizes that are easily identifiable to the consumer. This has meant the production of an artificial article which in practice will be unused in the imperial range.
Both hon. Gentlemen referred to progress in metrication. The hon. Member for Kingston-upon-Thames said he had been waiting with bated breath to see what was to happen. I gather that on that score he was even bluer in the face than he is in politics. I assure him that we hope to bring forward an order to meet Section 10(10). I am sure that the hon. Gentleman will agree to act as teller for the "Ayes" when such an Order is produced.
With those near assurances, I hope that the House will feel able to accept the Order.

Question put and agreed to.

Resolved,
That the Weights and Measures Act 1963 (Biscuits and Shortbread) Order 1975, a draft of which was laid before this House on 1st December, be approved.

OVERSEAS AID

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.),

That the Inter-American Development Bank (Subscription to Shares of the Additional Capital Stock) Order 1975, a draft of which was laid before this House on 28th November, be approved.—[Mr. Pavit.]

Question agreed to.

CROFTING REFORM (SCOTLAND) BILL

Order for Second Reading read.

Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland), That the Bill be committed to a Scottish Standing Committee.—[Mr. Pavitt.]

Question agreed to.

Bill (deemed to have been read a Second time) committed to a Scottish Standing Committee.

CROFTING REFORM (SCOTLAND) [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to confer new rights on crofters and cottars to acquire subjects tenanted or occupied by them; to confer rights on crofters to share in the value of land resumed by landlords or taken possession of compulsorily; to protect the interests of crofters and cottars from planning blight; to make further provision as to financial assistance for crofters, cottars and owner-occupiers of certain land; to make further provision as to the removal of land from crofting tenure; to make further provision as to the removal of land from crofting tenure; to amend the law with respect to common grazings; to extend the powers of the Scottish Land Court; to make provision for pensions and compensation for members of the Crofters Commission; it is expedient to authorise—

1. The payment out of moneys provided by Parliament of any increase attributable to the said Act in the expenditure incurred by the Secretary of State under

(a) section 3(10) of the Small Landholders (Scotland) Act 1911;
(b) section 22(2) or 31(1) of the Crofters (Scotland) Act 1955;
(c) Schedule 1 to the said Act of 1955 in the payment of pensions or compensation to members of the Crofters Commission;
(d) the said Act of 1955 in defraying any increase in the expenses of the Crofters Commission under that Act which is attributable to the said Act of the present Session.

2. The payment into the Consolidated Fund of all sums received by the Secretary of State by virtue of the said Act of the present Session.—[Mr. Pavitt.]

EXPENDITURE

Ordered,
That, notwithstanding the Order of the House of 18th November in the last Session of Parliament relating to nomination of members of the Expenditure Committee, Mr. Ted Graham be discharged from the Committee and Mr. Bryan Davies be added to the Committee for the remainder of this Parliament.

Ordered,
That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pavitt.]

CLEDDAU BRIDGE, DYFED

2.19 a.m.

Mr. Gwynfor Evans: On a television programme shown tonight—perhaps I should say "last night" since it is now 2.19 a.m.—the question which I was pressed to answer was whether there was any purpose in holding this debate on the Floor of the House since the Secretary of State had already given his answer, in his room in Whitehall last night. That answer is published in this morning's papers. Despite that, I think that the debate can serve an important purpose in awakening the ratepayers of Dyfed to what the Government are doing to them. It is the voice of the people which will compel the Government to dispense justice.
In view of the limited time, I will concentrate on what I believe to be the Government's moral responsibility for the greater part of the tremendous escalation of the Cleddau Bridge scheme costs, from about £5 million to about £12 million.
Building the bridge was a Pembrokeshire matter. It was Pembrokeshire which was empowered to build it by the Pembrokeshire County Council Act 1965. But the financial burden now falls on all Dyfed, and the people of the old counties of Carmarthen and Ceredigion do not yet realise what has hit them. Every ratepayer these days is weighed down by the burden of rates and sometimes there are complaints about the expenditure of sums

that are tiny in comparison with the amount involved in the Cleddau Bridge.
The deficiency in 1975–76, if there were no rate levy to meet it, could be about £1,500,000. This will have to be paid annually out of the rates if the Government evade their duty to help. To illustrate what this means to Dyfed I give four comparisons. This sum exceeds the whole cost of the maintenance and cleaning of unclassified roads in the county of Dyfed. It is approximately £250,000 more than the whole cost within Dyfed for the provision of residential care for the aged. It is more than the whole not cost of the fire service in Dyfed and it is approximately two-thirds of the net cost of the police service in Dyfed. If the amount were not charged to the rates the deficit in 20 years' time would be £34·77 million. When this is realised from Llanelli to Aberystwyth 200,000 Welshmen will call for the reason.
Before noting the stages of the Government's deep involvement in the Cleddau Bridge scheme I make the point that to say—as Government spokesmen sometimes do—that the previous Conservative Government did not help is no reason for persisiting in this Treasury-inspired attitude. Perhaps the hon. Member for Llanelli (Mr. Davies)—who is Minister of State at the Treasury—will find an opportunity of helping.
The Government's responsibility started when the then road engineer of the Welsh Office requested that the bridge design be submitted to the Minister of Transport for approval. In consequence of this Welsh Office request, a meeting took place at the offices of the Ministry of Transport on 18th March 1968, with five Ministry officials. Following that meeting a letter was sent from the Welsh Office on 10th April, 1968, to Freeman Fox & Partners, the bridge designers, confirming that the design was acceptable to the Government.
This is an extremely important point because the primary cause of the bridge's collapse was a fault in design. The interim report of the Merrison Committee left this in no doubt. Para. 17 states:
As a result of all our investigations and discussions we are left in no doubt what so-ever that the primary cause of the collapse of the Milford Haven Bridge was a failure of the diaphragm over Pier 6, and that this failure was certainly not primarily due to manufacture


of the bridge or its components. The diaphragm as designed simply was not strong enough to resist the severe compressive forces it was subjected to during erection.
The point to emphasise is that the Government had approved the faulty design which caused the collapse. I hope the Under-Secretary will not repeat the specious reasons given me by the Secretary of State on 24th November for rejecting the comparison between Cleddau and Ronan Point, where the Government had subsidised the rebuilding of high-rise flats—in the local authority sector—after a tragic collapse of part of the block. He contended then that the Ronan Point situation was quite different from Cleddau because the Government had in Ronan Point had:
a close concern in safety and design aspects. None of these is a Government responsibility in respect of the bridge."—[Official Report, 24th Nov., 1975; Vol. 901, c. 467.]
I have shown that even before the bridge was built, the Government had shown a close concern for its design and therefore for its safety. If this concern is the reason for a Government subsidy for rebuilding Ronan Point, it is equally valid in the case of the Cleddau Bridge. The two situations in their relation to the Government are almost identical.
It was after the collapse of a similar box girder bridge at Yarra in Australia that the then Secretary of State for the Environment stated in answer to a Parliamentary Question that the Government—once again the Government, one must note—were appointing
an independent technical committee to examine the basis of design and method of erection of large steel box girder bridges"—[Official Report, 5th November 1970; Vol. 805 c. 447]
This became known as the Merrison Committee. The main purpose of the Committee was to produce a code of practice to replace the British Standard 153.
Through this action in setting up the Committee the Government's concern for the bridge increased greatly. They became still more deeply involved in the delay in its rebuilding, and more responsible for the increased costs because rebuilding could not be resumed until the Merrison Committee Report. The final Report did not appear for 28 months, the period during which inflation gathered force. Can central Government, whatever

its political complexion, deny all responsibility for inflation? The Committee produced a new code of practice which should be universally followed, and the bridge has served as a most valuable guinea pig since then.
Apart from Cleddau, the only large box girder bridge under construction in the United Kingdom at this time was at Avonmouth, and this had reached approximately the same stage as Cleddau. There had been no collapse there, yet the two-year delay on it increased costs by £6 million. This increase was shouldered by the Government without demur because the Avonmouth bridge is on a motorway.
The Government, however, refuse to help the Dyfed council, which has inherited the problem after the Government's reorganisation of local authorities, another Government responsibility. The financial connection between the ratepayers of Carmarthen and Ceredigion and the Cleddau Bridge arose only because of the dismal reorganisation conceived by the Labour Government and executed by the Conservative Government.

Mr. Nicholas Edwards: I hope that the hon. Gentleman is not suggesting, as the Secretary of State did yesterday, that if there had not been local Government reorganisation it would have been right for the whole of this burden to fall on the people of Pembrokeshire. An amount of £1,400,000 would add perhaps 10p or 11p on the rate, a 20 per cent. increase. Surely that would have strengthened the case still further for the Government to intervene and rescue the helpless local authority.

Mr. Evans: That would have been an absurd situation and the Government could not have met it with the kind of equanimity which seems to have been produced to meet the situation I am describing. Ceredigion and old Carmarthenshire would not have been involved but for the Government's reorganisation.
Now the Government are rejecting their responsibility on the ground that whereas Cleddau was built for a local authority under a private Act, Avonmouth was wholly a central Government responsibility. This is a mean and unconvincing way of evading responsibility.
Even before the Merrison Report was published, pressure was brought by the


Government on the Pembrokeshire County Council to agree to adopt the Committee's recommendations. The Committee itself made it known that it would like to be in a position to frame its report in the certain knowledge that the council would comply with its rules. The interim Report of this Government Committee says,
we make a number of recommendations which we feel of sufficient importance that we regard their immediate applications as mandatory.
The chief highway engineer of the Department of the Environment specifically asked the county council to adopt the recommendations, which themselves, quite apart from inflation, added immensely to the cost.
The Department of the Environment said that their adoption by local authorities "is strongly recommended". This was followed up by a letter dated 23rd August 1971 from the Welsh Office to the Pembrokeshire County Council endorsing this, and adding,
Obviously any structure which did not fully satisfy the generally accepted criteria would be a factor against the selection of a new trunk road which incorporated it.
That is, the chances of trunking the bridge road, as the county wants, would be nil if the Merrison recommendations were not implemented. The Welsh Office letter further stated that the approval which had been given to the council to borrow money
should be regarded as based on the assumption that the bridge will be completed in accordance with the recommended criteria.
Yet after all this close involvement with the design of the original structure, with the rebuilding of the bridge and even after exhausting every means of compelling the council to delay rebuilding at a time of inflation and to implement the Government's recommendations, the Government with a deadpan face deny any responsibility for any share of the costs, telling the people of the old shires of Carmarthen and Ceredigion, who were brought into the matter by Government legislation, that they must bear the whole burden of the financial consequences of the accident, equivalent annually to the cost of maintaining and cleaning the thousands of miles of unclassified roads in Dyfed.
The Government tell us that they have no money to do justice to Dyfed ratepayers, yet yesterday the same Government decided to subsidise a wealthy and powerful American motor car corporation up to about £170 million. I wonder which funds they will rob to enable that to be done. Even if they refuse to bear their fair share of the costs of the Cleddau Bridge, surely they could at least make Dyfed an interest-free loan to cover those costs on the understanding that any insurance moneys received by the county will be passed on to the Government. Will the Minister, if he rejects again the idea of the grant which justice demands, at least consider that proposal?

1.32 a.m.

The Under-Secretary of State for Wales (Mr. Barry Jones): I have listened with interest to what the hon. Member for Carmarthen (Mr. Jones) has had to say about the Cleddau Bridge and about the financial problems which are faced by Dyfed County Council. To take up his first set of remarks, I think that all these debates that take place in the Chamber are of importance. I cannot agree with many of the hon. Gentleman's numerous and unjustifiable epithets that he worked into the skein of the argument.
The ground that the hon. Gentleman has covered is familiar. The arguments have been rehearsed again and again. I have met two deputations on this matter and only yesterday, as the hon. Gentleman said, my right hon. and learned Friend met a further deputation of hon. Members representing constituencies in Dyfed, including the hon. Gentleman. On 24th November there was a fairly lengthy exchange during Question Time, during which my right hon. and learned Friend said that he was always ready and willing to listen if there were something new to say. Yesterday in the Welsh Office, in front of a deputation of hon. Members, he repeated that assurance.
What we are hearing is not new and what the hon. Gentleman has said tonight is not new. The country has already made its case for Government help. My right hon. and learned Friend studied the case thoroughly and sympathetically but he did not consider that he had any real choice but to decide that he could not ask the taxpayer to bear the burden of what is a county responsibility, or the


rest of Wales to forgo such a proportion of its share of the road fund as to stop or delay, for example, the important development of the M4, which the Government and the Department consider one of the most significant keys to our jobs campaign, and one which we wily not sacrifice.
It is well known that this Government do not shirk their moral responsibilities. They never have, and they never will. But there is no such responsibility on the Government to subsidise the county council in the difficult situation in which it finds itself over the additional cost of this bridge, no matter how much we may sympathise with it, as we do.
Much has been said about the history of this dispute, as it might be described. May I add to that? The scheme was prepared in 1964 by Pembrokeshire County Council, and it was made clear by the Welsh Office that it was not considered to qualify for inclusion in the central Government programme of grant-aided schemes. The county council knew that there was no question of financial assistance for the bridge and, indeed, it was its intention to pay for it completely out of tolls.
To go a little further, what happened was the very tragic accident in June 1970 when part of the bridge collapsed, and I am sorry to say that four men working on the construction of the bridge were killed. Arising out of that, we had the Merrison Committee, with its very through investigation of box girder bridges.
The delay while the investigation was being carried out and the need to redesign and strengthen the bridge to what I think were the necessarily stringent Merrison criteria meant an increased cost from an estimated £3 million to about £12 million. It is that escalation in cost which has brought about the council's financial problem. But it does not in any degree alter the balance of responsibility between the council and central Government.
The hon. Gentleman has mentioned responsibility. First, it must be said, harsh though it may seem, that when a county council decides to go it alone, it enters into its independence of government for better or for worse. As my

right hon. and learned Friend has said already, the Government cannot be perpetually waiting in the wings as a universal insurer. There can be responsibility on central Government only it there is some special circumstance arising out of the events of the collapse which makes the Government responsible. I cannot accept that any such circumstances exist.
One of the factors in the increase in costs was the passage of time between the collapse and the resumption of building, during which time the Merrison Committee investigated and reported.

Mr. Gwynfor Evans: Will the hon. Gentleman enlarge a little on this matter of responsibility and explain at what time the counties of Carmarthen and Ceredigion made this decision?

Mr. Jones: Even at this very late hour the hon. Member can ask some rhetorical questions. I am sure that by the end of the debate I shall have given as much detail as possible, given the time and nature of the interventions.
The Merrison recommendations had to be translated into redesign. The central Government had a duty, in the light of what happened here and in Australia, to investigate the structure of box girder bridges. It was common prudence on the part of any bridge builder to await the results of that investigation before carrying on. A great deal of expensive research was carried out, which benefited those executing or contemplating bridge schemes, for which the taxpayer footed the bill. It would be very harsh indeed if the taxpayer were also asked to pay for the loss of time or loss of toll revenue incurred while that necessary research was being carried out.
The county council has suggested that there is some commitment because Cleddau bridge was the guinea pig used to test the Merrison criteria, and because the experience and information derived from the experiments carried out on the bridge will be to the benefit of all box girder bridges designed in the future. I welcome such recognition of the valuable work that is carried out on many fronts by the Transport and Road Research Laboratory in particular, and I am sure that the Cleddau Bridge construction benefited at least as much from that


research as any other scheme. It only remains for me to point out that it was paid for entirely from central Government funds. It is not correct to say that the criteria produced by the Merrison Committee, or the testing of these criteria by central Government, was in any way paid for locally by the Dyfed County Council.
Nor can it be said that the council was coerced by the central Government into the adoption of the Merrison standards, thereby increasing the cost through the need to redesign and reinforce. Indeed, in August 1971 the Director of Highways in the Welsh Office wrote to the Clerk of Pembrokeshire County Council making it absolutely clear that it was for the council to reach its own decision on the standards to be adopted for the bridge, for which the council was independently and fully responsible.
In fact, the pressure that was on the council was the pressure of circumstances. Let us look at the facts. Cleddau Bridge had collapsed; an expert investigation recommended in the strongest terms that such bridge designs should be modified and considerably strengthened. Could the builders of any box girder bridge, least of all one that had collapsed, have decided not to accept the revised criteria?
I am very sure that if the council had gone ahead with anything less than Merrison standards, the unions would have taken a very serious view. I cannot imagine that they would have been content that workers should be asked to take the risks of working on a bridge project where criteria vital to their safety were being ignored. Nor could the council expect insurers confidently to insure the contract.
The hon. Gentleman mentioned Avonmouth Bridge. The fact that the central Government bore what might be called the Merrison cost of Avonmouth Bridge is not really relevant to the case made by Dyfed County Council. The Avonmouth Bridge is part of the M5; it is a clear central Government commitment as part of a motorway.
In that context I must also refer to the collapse some years ago of part of a residential tower block at Ronan Point. It has correctly been pointed out by the hon. Member that the Government were prepared to meet increased and unexpected

costs. But there were considerations that were quite different from these which apply in this case. In the first place, the housing concerned was heavily subsidised by the central Government, which therefore had a responsibility for a considerable amount of the taxpayers' money. Strengthening was necessary to save that investment. In subsidising the strengthening of tower blocks, the Government were simply accepting the most economical way of fulfilling an already accepted commitment to safeguard their own investment and to ensure adequate housing for people who would otherwise have been homeless. With the greatest respect to Dyfed and to Cleddau Bridge, it is quite wrong to regard the two situations as even remotely similar.
I turn now to design responsibility. It is equally wrong to say that officials of central Government approved the design of the Cleddau Bridge. As part of the normal procedures in force for the granting of consent for borrowing at the time funds for the Cleddau Bridge were being raised, central Government were given plans of the bridge to check that there was nothing to suggest that the proposals were unreasonable. The design was not checked in detail and the Pembrokeshire County Council was never told that it had been. It is most surprising to hear the theory that the central Government should bear such a detailed financial responsibility for schemes in which the only Government participation is to give loan sanction.

Mr. Nicholas Edwards: Does the hon. Gentleman agree that the Department's inspector, after hearing all the evidence at a public inquiry, made that strong recommendation in his report to the Secretary of State?

Mr. Jones: I think that what I am putting to the House in this debate indicates that we are taking absolutely the right view.
I can readily appreciate the hon. Gentleman's concern that ratepayers in his constituency should find themselves saddled with paying for something they had nothing to do with and probably would not have agreed with. My right hon. and learned Friend, as a Dyfed ratepayer at Llandysul, certainly understands the hon. Gentleman's feelings. But let me make it absolutely clear that


the present Government bear no responsibility for the building of the bridge or for the local government reorganisation that now results in the costs being borne by ratepayers in Aberystwyth, Carmarthen and Llanelli.
That latter responsibility rests firmly with the party to which the hon. Member for Pembroke (Mr. Edwards) belongs, and I am surprised that the pressure he is exerting on the present Government to take over the financial responsibility incurred by the old Pembrokeshire County Council was not exerted on his own side when they were in power. I find it hard to believe that neither that Government nor the Pembrokeshire County Council realised over a period of four years that there was bound to be a substantial increase in cost and that the reorganisation

of local government would land it in the laps of the Dyfed ratepayers.
The hon. Member for Pembroke, during the dying days of his last election campaign, talked about freeing the Cleddau Bridge from tolls. It is very strange that in the four wasted years of his Government nothing was done about tolls in other parts of Britain. The necessary decisions were not taken. Perhaps the promise indicated his confidence that we would be returned to power. The promise had the scent—

The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eleven minutes to Three o'clock a.m.